[ ]
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TOP SHIPS INC.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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1 Vasilisis Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece
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(Address of principal executive offices)
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Alexandros Tsirikos, (Tel) +30 210 812 8180, atsirikos@topships.org, (Fax) +30 210 614 1273, 1 Vasilisis
Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Title of each class
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Name of each exchange
on which registered
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Common Stock par value $0.01 per share
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Nasdaq Global Select Market
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NONE
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(Title of class)
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NONE
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(Title of class)
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Yes
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No
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X
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Yes
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No
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X
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Yes
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X
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No
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Yes
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X
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No
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Large accelerated filer
☐
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Accelerated filer
☐
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Non-accelerated filer
☒
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X
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U.S. GAAP
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International Financial Reporting Standards as issued by the International
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Accounting Standards Board
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Other
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________ Item 17
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________ Item 18
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Yes
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No
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X
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PART I
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ITEM 1.
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IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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1
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ITEM 2.
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OFFER STATISTICS AND EXPECTED TIMETABLE
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1
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ITEM 3.
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KEY INFORMATION
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1
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ITEM 4.
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INFORMATION ON THE COMPANY
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23
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ITEM 4A.
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UNRESOLVED STAFF COMMENTS
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36
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ITEM 5.
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OPERATING AND FINANCIAL REVIEW AND PROSPECTS
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36
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ITEM 6.
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DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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54
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ITEM 7.
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MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
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59
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ITEM 8.
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FINANCIAL INFORMATION.
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62
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ITEM 9.
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THE OFFER AND LISTING.
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63
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ITEM 10.
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ADDITIONAL INFORMATION
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64
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ITEM 11.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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74
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ITEM 12.
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DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
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74
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PART II
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ITEM 13.
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DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
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75
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ITEM 14.
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
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75
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ITEM 15.
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CONTROLS AND PROCEDURES
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75
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ITEM 16A.
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AUDIT COMMITTEE FINANCIAL EXPERT
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76
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ITEM 16B.
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CODE OF ETHICS
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76
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ITEM 16C.
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PRINCIPAL AUDITOR FEES AND SERVICES
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77
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ITEM 16D.
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EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
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77
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ITEM 16E.
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
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77
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ITEM 16F.
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CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
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77
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ITEM 16G.
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CORPORATE GOVERNANCE
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78
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ITEM 16H.
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MINE SAFETY DISCLOSURE
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78
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PART III
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ITEM 17.
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FINANCIAL STATEMENTS
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78
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ITEM 18.
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FINANCIAL STATEMENTS
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78
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ITEM 19.
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EXHIBITS
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78
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Year Ended December 31,
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|||||||||||||||||||
U.S. Dollars in thousands, except per share data
|
2010
|
2011
|
2012
|
2013
|
2014
|
|||||||||||||||
STATEMENT OF COMPREHENSIVE INCOME/ (LOSS)
|
|
|
|
|
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|||||||||||||||
Revenues
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90,875
|
79,723
|
31,428
|
20,074
|
3,602
|
|||||||||||||||
Other Income
|
-
|
872
|
-
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-
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-
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|||||||||||||||
|
||||||||||||||||||||
Voyage expenses
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2,468
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7,743
|
1,023
|
663
|
113
|
|||||||||||||||
Charter hire expense
|
480
|
2,380
|
-
|
-
|
-
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|||||||||||||||
Lease termination expense
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-
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5,750
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-
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-
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-
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|||||||||||||||
Vessel operating expenses
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12,853
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10,368
|
814
|
745
|
1,143
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|||||||||||||||
Dry-docking costs
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4,103
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1,327
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-
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-
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-
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|||||||||||||||
Management fees-third parties
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159
|
439
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-
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-
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-
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|||||||||||||||
Management fees-related parties
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3,131
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5,730
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2,345
|
1,351
|
703
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|||||||||||||||
General and administrative expenses
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18,142
|
15,364
|
7,078
|
3,258
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2,335
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|||||||||||||||
Other operating income
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(861
|
)
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||||||||||||||||||
(Gain)/Loss on sale of vessels
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(5,101
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)
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62,543
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-
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(14
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)
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-
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|||||||||||||
Vessel depreciation
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32,376
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25,327
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11,458
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6,429
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757
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|||||||||||||||
Impairment on vessels
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-
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114,674
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61,484
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-
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-
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|||||||||||||||
Gain on disposal of subsidiaries
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-
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-
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-
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(1,591
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)
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-
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||||||||||||||
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||||||||||||||||||||
Operating (loss)/income
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22,264
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(171,050
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)
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(52,774
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)
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9,233
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(588
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)
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||||||||||||
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||||||||||||||||||||
Interest and finance costs
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(14,776
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)
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(16,283
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)
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(9,345
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)
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(7,443
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)
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(450
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)
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||||||||||
(Loss)/Gain on derivative financial instruments
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(5,057
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)
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(1,793
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)
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(447
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)
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(171
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)
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3,866
|
|||||||||||
Interest income
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136
|
95
|
175
|
131
|
74
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|||||||||||||||
Other (expense)/income, net
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(54
|
)
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(81
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)
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(1,593
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)
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(342
|
)
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(6
|
)
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||||||||||
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-
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|||||||||||||||||||
Net income/(loss)
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2,513
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(189,112
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)
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(63,984
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)
|
1,408
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2,896
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|||||||||||||
Other comprehensive income / (loss)
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(51
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)
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-
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-
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-
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-
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||||||||||||||
Comprehensive income/(loss)
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2,462
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(189,112
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)
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(63,984
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)
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1,408
|
2,896
|
|||||||||||||
Earnings/(Loss) per share, basic
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$
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5.60
|
$
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(209.97
|
)
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$
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(26.36
|
)
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$
|
0.58
|
$
|
0.22
|
||||||||
Earnings/(Loss) per share, diluted
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$
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5.60
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$
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(209.97
|
)
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$
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(26.36
|
)
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$
|
0.58
|
$
|
0.18
|
||||||||
Weighted average common shares outstanding, basic
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439,325
|
900,668
|
2,427,083
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2,437,361
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12,958,111
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|||||||||||||||
Weighted average common shares outstanding, diluted
|
439,677
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900,668
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2,427,083
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2,444,504
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15,743,449
|
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Year Ended December 31,
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|||||||||||||||||||
U.S. dollars in thousands
|
2010
|
2011
|
2012
|
2013
|
2014
|
|||||||||||||||
BALANCE SHEET DATA
|
|
|
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|
|||||||||||||||
Current assets
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3,420
|
14,866
|
26,735
|
10,262
|
1,227
|
|||||||||||||||
Total assets
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622,091
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296,373
|
211,415
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27,868
|
75,575
|
|||||||||||||||
Current liabilities, including current portion of long-term debt
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366,609
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219,690
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193,630
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8,605
|
9,334
|
|||||||||||||||
Non-Current liabilities
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-
|
-
|
4,706
|
4,468
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23,712
|
|||||||||||||||
Total debt
|
337,377
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193,749
|
172,619
|
-
|
19,419
|
|||||||||||||||
Common stock
|
5
|
24
|
24
|
25
|
190
|
|||||||||||||||
Stockholders' equity
|
255,482
|
76,684
|
13,079
|
14,795
|
42,529
|
FLEET DATA
|
|
|
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|
||||||||||||||||
Total number of vessels at end of period
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13.0
|
7.0
|
7.0
|
0.0
|
1.0
|
|||||||||||||||
Average number of vessels(1)
|
13.1
|
11.7
|
7.0
|
5.1
|
0.5
|
|||||||||||||||
Total calendar days for fleet(2)
|
4,781
|
4,281
|
2,562
|
1,852
|
195
|
|||||||||||||||
Total available days for fleet(3)
|
4,686
|
4,218
|
2,546
|
1,852
|
195
|
|||||||||||||||
Total operating days for fleet(4)
|
4,676
|
4,180
|
2,544
|
1,852
|
195
|
|||||||||||||||
Total time charter days for fleet
|
2,076
|
1,109
|
124
|
-
|
195
|
|||||||||||||||
Total bareboat charter days for fleet
|
2,555
|
2,551
|
2,420
|
1,852
|
-
|
|||||||||||||||
Total spot market days for fleet
|
45
|
520
|
-
|
-
|
-
|
|||||||||||||||
Fleet utilization(5)
|
99.80
|
%
|
99.1
|
%
|
99.92
|
%
|
100.00
|
%
|
100.00
|
%
|
(1)
|
Average number of vessels is the number of vessels that constituted our fleet (including leased vessels) for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
|
(2)
|
Calendar days are the total days the vessels were in our possession for the relevant period. Calendar days are an indicator of the size of our fleet over the relevant period and affect both the amount of revenues and expenses that we record during that period.
|
(3)
|
Available days are the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys and the aggregate amount of time that we spend positioning our vessels. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
|
(4)
|
Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen technical circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period that our vessels actually generate revenue.
|
(5)
|
Fleet utilization is calculated by dividing the number of operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades, special or intermediate surveys and vessel positioning.
|
(6)
|
Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is consistent with industry standards and is determined by dividing time charter equivalent revenues or TCE revenues by operating days for the relevant time period. TCE revenues are revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE revenues and TCE rate, which are non-GAAP measures, provide additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. The table below reflects the reconciliation of TCE revenues to revenues as reflected in the consolidated statements of operations and our calculation of TCE rates for the periods presented.
|
(7)
|
Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs are calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.
|
(8)
|
Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.
|
U.S. dollars in thousands, except average daily time charter equivalent which are are US Dollars and total operating days
|
2010
|
2011
|
2012
|
2013
|
2014
|
|||||||||||||||
On a consolidated basis
|
|
|
|
|
|
|||||||||||||||
Revenues
|
$
|
90,875
|
$
|
79,723
|
$
|
31,428
|
$
|
20,074
|
$
|
3,602
|
||||||||||
Less:
|
||||||||||||||||||||
Voyage expenses
|
(2,468
|
)
|
(7,743
|
)
|
(1,023
|
)
|
(663
|
)
|
(113
|
)
|
||||||||||
|
||||||||||||||||||||
Time charter equivalent revenues
|
$
|
88,407
|
$
|
71,980
|
$
|
30,405
|
$
|
19,411
|
$
|
3,489
|
||||||||||
|
||||||||||||||||||||
Total operating days
|
4,676
|
4,180
|
2,544
|
1,852
|
195
|
|||||||||||||||
Average Daily Time Charter Equivalent (TCE)
|
$
|
18,907
|
$
|
17,220
|
$
|
11,951
|
$
|
10,484
|
$
|
17,892
|
|
·
|
supply and demand for refined petroleum products and crude oil;
|
|
·
|
changes in crude oil production and refining capacity resulting in shifts in trade flows for crude oil and petroleum products;
|
|
·
|
the location of regional and global crude oil refining facilities that affect the distance oil is to be moved by sea;
|
|
·
|
global and regional economic and political conditions, including developments in international trade, fluctuations in industrial and agricultural production, and armed conflicts, terrorist activities and strikes;
|
|
·
|
increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to
oil pipelines in those markets
;
|
|
·
|
environmental and other legal and regulatory developments;
|
|
·
|
currency exchange rates;
|
|
·
|
weather, natural disasters and other acts of God;
|
|
·
|
competition from alternative sources of energy, other shipping companies and other modes of transportation; and
|
|
·
|
international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars.
|
|
·
|
the number of newbuilding deliveries;
|
|
·
|
current and expected purchase orders for vessels;
|
|
·
|
the scrapping rate of older vessels;
|
|
·
|
vessel freight rates;
|
|
·
|
the price of steel and vessel equipment;
|
|
·
|
technological advances in the design and capacity of vessels;
|
|
·
|
potential conversion of vessels to alternative use;
|
|
·
|
changes in environmental and other regulations that may limit the useful lives of vessels;
|
|
·
|
port or canal congestion;
|
|
·
|
the number of vessels that are out of service at a given time; and
|
|
·
|
changes in global crude oil production.
|
|
·
|
we may not be able to employ our vessels at charter rates as favorable to us as historical rates or at all or operate our vessels profitably; and
|
|
·
|
the market value of our vessels could decrease, which may cause us to recognize losses if any of our vessels are sold or if their values are impaired.
|
|
·
|
general economic and market conditions affecting the international tanker shipping industry;
|
|
·
|
prevailing level of charter rates;
|
|
·
|
competition from other shipping companies;
|
|
·
|
types, sizes and ages of vessels;
|
|
·
|
other modes of transportation;
|
|
·
|
supply and demand for vessels;
|
|
·
|
cost of newbuildings;
|
|
·
|
price of steel;
|
|
·
|
governmental or other regulations; and
|
|
·
|
technological advances.
|
·
|
maintain a consolidated leverage ratio of not more than 75%; and
|
|
·
|
maintain minimum free liquidity of $0.75 million per vessel and $0.5 million per bareboated chartered-in vessel;
|
|
·
|
increase our vulnerability to general economic downturns and adverse competitive and industry conditions;
|
|
·
|
require us to dedicate a substantial portion, if not all, of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
|
|
·
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
|
·
|
place us at a competitive disadvantage compared to competitors that have less debt or better access to capital;
|
|
·
|
limit our ability to raise additional financing on satisfactory terms or at all; and
|
|
·
|
adversely impact our ability to comply with the financial and other restrictive covenants in our sale and leaseback and future credit agreements, which could result in an event of default under such agreements.
|
|
·
|
generate excess cash flow for investment without jeopardizing our ability to cover current and foreseeable working capital needs (including debt service);
|
|
·
|
raise equity and obtain required financing for our existing and new operations;
|
|
·
|
locate and acquire suitable vessels;
|
|
·
|
identify and consummate acquisitions or joint ventures;
|
|
·
|
integrate any acquired business successfully with our existing operations;
|
|
·
|
hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet;
|
|
·
|
enhance our customer base; and
|
|
·
|
manage expansion.
|
|
·
|
fluctuations in interest rates;
|
|
·
|
fluctuations in the availability or the price of oil;
|
|
·
|
fluctuations in foreign currency exchange rates;
|
|
·
|
announcements by us or our competitors;
|
|
·
|
changes in our relationships with customers or suppliers;
|
|
·
|
actual or anticipated fluctuations in our semi-annual and annual results and those of other public companies in our industry;
|
|
·
|
changes in United States or foreign tax laws;
|
|
·
|
actual or anticipated fluctuations in our operating results from period to period;
|
|
·
|
shortfalls in our operating results from levels forecast by securities analysts;
|
|
·
|
market conditions in the shipping industry and the general state of the securities markets;
|
|
·
|
mergers and strategic alliances in the shipping industry;
|
|
·
|
changes in government regulation;
|
|
·
|
a general or industry-specific decline in the demand for, and price of, shares of our common stock resulting from capital market conditions independent of our operating performance;
|
|
·
|
the loss of any of our key management personnel; and
|
|
·
|
our failure to successfully implement our business plan.
|
|
·
|
our existing shareholders' proportionate ownership interest in us will decrease;
|
|
·
|
the amount of cash available for dividends payable on the shares of our common stock may decrease;
|
|
·
|
the relative voting strength of each previously outstanding common share may be diminished; and
|
|
·
|
the market price of the shares of our common stock may decline.
|
|
·
|
authorizing our Board of Directors to issue "blank check" preferred stock without shareholder approval;
|
|
·
|
providing for a classified Board of Directors with staggered, three-year terms;
|
|
·
|
prohibiting cumulative voting in the election of directors;
|
|
·
|
authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for the directors;
|
|
·
|
prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action;
|
|
·
|
limiting the persons who may call special meetings of shareholders; and
|
|
·
|
establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by shareholders at shareholder meetings.
|
|
·
|
continue to operate our vessels and service our customers;
|
|
·
|
renew existing charters upon their expiration;
|
|
·
|
obtain new charters;
|
|
·
|
obtain financing on commercially acceptable terms;
|
|
·
|
obtain insurance on commercially acceptable terms;
|
|
·
|
maintain satisfactory relationships with our customers and suppliers; and
|
|
·
|
successfully execute our growth strategy.
|
|
·
|
two 39,000 dwt product/chemical tankers, scheduled for delivery from Hyundai Dockyard in the third quarter of 2015 and in the first quarter of 2016, respectively; and
|
|
·
|
two 50,000 dwt product/chemical tankers, scheduled for delivery from Hyundai Dockyard in the second and third quarter of 2016, respectively.
|
Name
|
Deadweight
|
Charterer
|
Charter Duration
|
Gross Rate fixed period/ options
|
M/T Stenaweco Energy
|
50.000
|
Stena Weco A/S
|
4+1+1 years
|
$16,500 / $17,350 / $18,100
|
M/T Stenaweco Evolution
|
50.000
|
Stena Weco A/S
|
4+1+1 years
|
$16,200 (first 3 years) and $16,350 (4th year) / $17,200 / $18,000
|
Name
|
Deadweight
|
Expected Delivery
|
Charterer
|
Charter Duration
|
Gross Rate fixed period/ options
|
Hull No S418 (tbn Ecofleet)
|
39.000
|
Q3 2015
|
BPShipping Ltd UK
|
3+1+1 years
|
$15,200 / $16,000 / $16,750
|
Hull No S419 (tbn Eco Revolution)
|
39.000
|
Q1 2016
|
BPShipping Ltd UK
|
3+1+1 years
|
$15,200 / $16,000 / $16,750
|
Hull No S414 (tbn Stenaweco Excellence)
|
50.000
|
Q2 2016
|
Stena Weco A/S
|
3+1+1 years
|
$16,200 / $17,200 / $18,000
|
Hull No S417 (tbn Nord Valiant)
|
50.000
|
Q3 2016
|
DS Norden A/S
|
5+1+1 years
|
$16,800 / $17,600 / $18,400
|
|
·
|
injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
|
|
·
|
injury to, or economic losses resulting from, the destruction of real and personal property;
|
|
·
|
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
|
|
·
|
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
|
·
|
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
|
|
·
|
net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources
|
|
·
|
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;
|
|
·
|
on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;
|
|
·
|
the development of vessel security plans;
|
|
·
|
ship identification number to be permanently marked on a vessel's hull;
|
|
·
|
a continuous synopsis record kept onboard showing a vessel's history, including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and
|
|
·
|
compliance with flag state security certification requirements.
|
|
·
|
Calendar days. We define calendar days as the total number of days the vessels were in our possession for the relevant period. Calendar days are an indicator of the size of our fleet during the relevant period and affect both the amount of revenues and expenses that we record during that period.
|
|
·
|
Available days. We define available days as the number of calendar days less the aggregate number of days that our vessels are off-hire due to scheduled repairs, or scheduled guarantee inspections in the case of newbuildings, vessel upgrades or special or intermediate surveys and the aggregate amount of time that we spend positioning our vessels. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
|
|
·
|
Operating days. We define operating days as the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen technical circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period that our vessels actually generate revenues.
|
|
·
|
Fleet utilization. We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or scheduled guarantee inspections in the case of newbuildings, vessel upgrades, special or intermediate surveys and vessel positioning.
|
|
·
|
Spot Charter Rates. Spot charter rates are volatile and fluctuate on a seasonal and year-to-year basis. Fluctuations derive from imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes.
|
|
·
|
Bareboat Charter Rates. Under a bareboat charter party, all operating costs, voyage costs and cargo-related costs are covered by the charterer, who takes both the operational and the shipping market risk.
|
|
·
|
TCE Revenues / TCE Rates. We define TCE revenues as revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by a charterer under a time charter, as well as commissions. We believe that presenting revenues net of voyage expenses neutralizes the variability created by unique costs associated with particular voyages or the deployment of vessels on the spot market and facilitates comparisons between periods on a consistent basis. We calculate daily TCE rates by dividing TCE revenues by operating days for the relevant time period. TCE revenues include demurrage revenue, which represents fees charged to charterers associated with our spot market voyages when the charterer exceeds the agreed upon time required to load or discharge a cargo. We calculate daily direct vessel operating expenses and daily general and administrative expenses for the relevant period by dividing the total expenses by the aggregate number of calendar days that we owned each vessel for the period.
|
|
·
|
obtain the charterer's consent to us as the new owner;
|
|
·
|
obtain the charterer's consent to a new technical manager;
|
|
·
|
in some cases, obtain the charterer's consent to a new flag for the vessel;
|
|
·
|
arrange for a new crew for the vessel, and where the vessel is on charter, in some cases, the crew must be approved by the charterer;
|
|
·
|
replace all hired equipment on board, such as gas cylinders and communication equipment;
|
|
·
|
negotiate and enter into new insurance contracts for the vessel through our own insurance brokers; and
|
|
·
|
register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state.
|
|
·
|
employment and operation of tankers; and
|
|
·
|
management of the financial, general and administrative elements involved in the conduct of our business and ownership of tankers.
|
|
·
|
vessel maintenance and repair;
|
|
·
|
crew selection and training;
|
|
·
|
vessel spares and stores supply;
|
|
·
|
contingency response planning;
|
|
·
|
onboard safety procedures auditing;
|
|
·
|
accounting;
|
|
·
|
vessel insurance arrangement;
|
|
·
|
vessel chartering;
|
|
·
|
vessel security training and security response plans (ISPS);
|
|
·
|
obtain ISM certification and audit for each vessel within the six months of taking over a vessel;
|
|
·
|
vessel hire management;
|
|
·
|
vessel surveying; and
|
|
·
|
vessel performance monitoring.
|
|
·
|
management of our financial resources, including banking relationships,
i.e.
, administration of bank loans and bank accounts;
|
|
·
|
management of our accounting system and records and financial reporting;
|
|
·
|
administration of the legal and regulatory requirements affecting our business and assets; and
|
|
·
|
management of the relationships with our service providers and customers.
|
|
·
|
charter rates and periods of charter hire for our tankers;
|
|
·
|
utilization of our tankers (earnings efficiency);
|
|
·
|
levels of our tanker's operating expenses and dry-docking costs;
|
|
·
|
depreciation and amortization expenses;
|
|
·
|
financing costs; and
|
|
·
|
fluctuations in foreign exchange rates.
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
%
|
%
|
|||||||||||||||||||||||
|
($ in thousands)
|
|
|
|
|
|||||||||||||||||||||||
Voyage Revenues
|
31,428
|
20,074
|
3,602
|
(11,354
|
)
|
-36.1
|
%
|
(16,472
|
)
|
-82.1
|
%
|
|||||||||||||||||
Voyage expenses
|
1,023
|
663
|
113
|
(360
|
)
|
-35.2
|
%
|
(550
|
)
|
-83.0
|
%
|
|||||||||||||||||
Vessel operating expenses
|
814
|
745
|
1,143
|
(69
|
)
|
-8.5
|
%
|
398
|
53.4
|
%
|
||||||||||||||||||
Vessel depreciation
|
11,458
|
6,429
|
757
|
(5,029
|
)
|
-43.9
|
%
|
(5,672
|
)
|
-88.2
|
%
|
|||||||||||||||||
Management fees-related parties
|
2,345
|
1,351
|
703
|
(994
|
)
|
-42.4
|
%
|
(648
|
)
|
-48.0
|
%
|
|||||||||||||||||
General and administrative expenses
|
7,078
|
3,258
|
2,335
|
(3,820
|
)
|
-54.0
|
%
|
(923
|
)
|
-28.3
|
%
|
|||||||||||||||||
Other operating income
|
-
|
-
|
(861
|
)
|
-
|
-
|
%
|
(861
|
)
|
-100.0
|
||||||||||||||||||
Gain on sale of vessels
|
-
|
(14
|
)
|
-
|
(14
|
)
|
-100.0
|
%
|
14
|
100.0
|
%
|
|||||||||||||||||
Gain on disposal of subsidiaries
|
-
|
(1,591
|
)
|
-
|
(1,591
|
)
|
-100.0
|
1,591
|
100.0
|
%
|
||||||||||||||||||
Impairment on vessels
|
61,484
|
-
|
-
|
(61,484
|
)
|
-100.0
|
%
|
-
|
-
|
|||||||||||||||||||
Expenses
|
84,202
|
10,841
|
4,190
|
(73,361
|
)
|
-87.1
|
%
|
(6,651
|
)
|
-61.4
|
%
|
|||||||||||||||||
Operating (loss)/income
|
(52,774
|
)
|
9,233
|
(588
|
)
|
62,007
|
-117.5
|
%
|
(9,821
|
)
|
-106.4
|
%
|
||||||||||||||||
Interest and finance costs
|
(9,345
|
)
|
(7,443
|
)
|
(450
|
)
|
( 1,902
|
)
|
-20.4
|
%
|
(6,993
|
)
|
-94.0
|
%
|
||||||||||||||
(Loss)/Gain on derivative financial instruments
|
(447
|
)
|
(171
|
)
|
3,866
|
(276
|
)
|
-61.7
|
%
|
4,037
|
2360.8
|
%
|
||||||||||||||||
Interest income
|
175
|
131
|
74
|
(44
|
)
|
-25.1
|
%
|
(57
|
)
|
-43.5
|
%
|
|||||||||||||||||
Other, net
|
(1,593
|
)
|
(342
|
)
|
(6
|
)
|
(1,251
|
)
|
-78.5
|
%
|
336
|
98.2
|
%
|
|||||||||||||||
Total other (expenses) / gain, net
|
(11,210
|
)
|
(7,825
|
)
|
3,484
|
(3,385
|
)
|
-30.2
|
%
|
11,309
|
144.5
|
%
|
||||||||||||||||
Net (loss) / income
|
(63,984
|
)
|
1,408
|
2,896
|
(65,392
|
)
|
-102.2
|
%
|
1,488
|
105.7
|
%
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||
|
%
|
%
|
||||||||||||||||||
FLEET
|
|
|
|
|
|
|||||||||||||||
Total number of vessels at end of period
|
7.0
|
0.0
|
1.0
|
-100.0
|
%
|
100.0
|
%
|
|||||||||||||
Average number of vessels
|
7.0
|
5.1
|
0.5
|
-27.1
|
%
|
-90.2
|
%
|
|||||||||||||
Total operating days for fleet under spot charters
|
0.0
|
0.0
|
0.0
|
0.0
|
%
|
0.0
|
%
|
|||||||||||||
Total operating days for fleet under time charters
|
124.0
|
0.0
|
195.0
|
-100.0
|
%
|
100.0
|
%
|
|||||||||||||
Total operating days for fleet under bareboat charters
|
2,420.0
|
1,852.0
|
0.0
|
-23.5
|
%
|
-100.0
|
%
|
|||||||||||||
Average TCE ($/day)
|
11,951
|
10,484
|
17,892
|
-12.3
|
%
|
70.7
|
%
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
Revenues
|
31,428
|
20,074
|
3,602
|
(11,354
|
)
|
-36.1
|
%
|
(16,472
|
)
|
-82.1
|
%
|
|
1.
|
Voyage expenses
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
Voyage Expenses
|
1,023
|
663
|
113
|
(360
|
)
|
-35.2
|
%
|
(550
|
)
|
-83.0
|
%
|
|
2.
|
Vessel operating expenses
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
Vessel Operating Expenses
|
814
|
745
|
1,143
|
(69
|
)
|
-8.5
|
%
|
398
|
53.4
|
%
|
|
3.
|
Vessel depreciation
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
Vessel Depreciation
|
11,458
|
6,429
|
757
|
(5,029
|
)
|
-43.9
|
%
|
(5,672
|
)
|
-88.2
|
%
|
|
4.
|
Management fees—related parties
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
Management fees—related parties
|
2,345
|
1,351
|
703
|
(994
|
)
|
-42.4
|
%
|
(648
|
)
|
-48.0
|
%
|
|
5.
|
General and administrative expenses
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
General and Administrative Expenses
|
7,078
|
3,258
|
2,335
|
(3,820
|
)
|
-54.0
|
%
|
(923
|
)
|
-28.3
|
%
|
|
6.
|
Other operating income
|
|
7.
|
(Loss)/Gain on sale of vessels
|
|
8.
|
Gain on disposal of subsidiaries
|
|
9.
|
Impairment of vessels
|
|
10.
|
Interest and Finance Costs
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
Interest and finance costs
|
(9,345
|
)
|
(7,443
|
)
|
(450
|
)
|
( 1,902
|
)
|
-20.4
|
%
|
(6,993
|
)
|
-94.0
|
%
|
|
11.
|
Loss on derivative financial instruments
|
|
Year Ended December 31,
|
Change
|
||||||||||||||||||||||||||
|
2012
|
2013
|
2014
|
YE13 v YE12
|
YE14 v YE13
|
|||||||||||||||||||||||
|
($ in thousands)
|
%
|
%
|
|||||||||||||||||||||||||
(Loss)/Gain on Derivative Financial Instruments
|
(447
|
)
|
(171
|
)
|
3,866
|
(276
|
)
|
-61.7
|
%
|
4,037
|
2,360.8
|
%
|
Total current assets
|
1.2
|
|||
Current portion of debt
|
1.4
|
|||
Other current liabilities
|
7.9
|
|||
Total current liabilities
|
9.3
|
|||
Working capital deficit
|
(8.1
|
)
|
||
Less other material capital requirements for the coming 12 months (see analysis below):
|
(54.6
|
)
|
||
Cash deficit (Working capital less other capital requirements)
|
(62.7
|
)
|
Long term debt principal payments
|
1.4
|
|||
Long term debt interest
|
0.7
|
|||
Termination fee payments for M/T Delos
|
1.1
|
|||
Termination fee interest for M/T Delos
|
0.1
|
|||
Payments under management agreements
|
0.9
|
|||
Vessel acquisitions
|
50.4
|
|||
Total material capital requirements:
|
54.6
|
|
|
Payments due by period
|
||||||||||||||||||
Contractual Obligations
:
|
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
|||||||||||||||
(1) (i) Long term debt
A
|
$
|
19.4
|
$
|
1.4
|
$
|
2.8
|
$
|
2.8
|
$
|
12.4
|
||||||||||
(ii) Interest
B
|
$
|
4.7
|
$
|
0.7
|
$
|
1.3
|
$
|
1.1
|
$
|
1.6
|
||||||||||
(2) Operating leases
C
|
$
|
0.4
|
$
|
0.0
|
$
|
0.1
|
$
|
0.1
|
$
|
0.2
|
||||||||||
(3) (i) Termination fee payments for M/T Delos
D
|
$
|
4.2
|
$
|
1.1
|
$
|
3.1
|
$
|
0.0
|
$
|
0.0
|
||||||||||
(ii) Termination fee interest for M/T Delos
E
|
$
|
0.2
|
$
|
0.1
|
$
|
0.1
|
$
|
0.0
|
$
|
0.0
|
||||||||||
(4) Vessel Management Fees to CSM
F
|
$
|
7.6
|
$
|
0.9
|
$
|
4.0
|
$
|
2.7
|
$
|
0.0
|
||||||||||
(5) Vessel acquisitions
G
|
$
|
119.9
|
$
|
50.4
|
$
|
69.5
|
$
|
0.0
|
$
|
0.0
|
||||||||||
Total
|
$
|
156.4
|
$
|
54.6
|
$
|
80.9
|
$
|
6.7
|
$
|
14.2
|
A.
|
Relates to the principal repayments under our $20.1 million credit facility with Alpha Bank of Greece. On January 29, 2015, the Alpha Bank facility was fully repaid with the proceeds from the sale and leaseback of the M/T Stenaweco Energy (see F. Tabular Disclosure of Contractual Obligations – Debt Facilities).
|
B.
|
Relates to estimated interest payments under our $20.1 million credit facility with Alpha Bank of Greece. We have assumed an interest rate of 4% going forward (fixed margin of 3.75% plus a LIBOR estimate of 0.25%) (see F. Tabular Disclosure of Contractual Obligations – Debt Facilities).
|
C.
|
Relates to the minimum rentals payable for the office space. Note that as of the date of this report
our fleet consists of two bareboat chartered-in 50,000 dwt product/chemical tankers vessels, M/T Stenaweco Energy and M/T Stenaweco Evolution. Adding the effect of these two bareboat chartered-in vessels, our contractual obligations for operating leases would be $5.2 million in less than one year, $12.7 million in one to three years, $12.7 million in three to five years and $13.8 in more than five years.
|
D.
|
Relates to the termination fee installments payable to the owner of the M/T Delos (Tranche A and Trance B) (see "Operating Leases" below).
|
E.
|
Relates to the interest payments deriving from the M/T Delos termination agreement. We have assumed an interest rate of 3.25% going forward (fixed margin of 3% plus a LIBOR estimate of 0.25%) (see "Operating Leases" below).
|
F.
|
Relates to our obligation for monthly management fees under our new letter agreement with CSM for all the vessels in our fleet. These fees also cover the provision of services rendered in relation to the maintenance of proper books and records, services in relation to financial reporting requirements under Commission and NASDAQ rules as well as newbuilding supervision services. Please see "Item 4. Information on the Company—B. Business Overview—CSM—Letter Agreement and Management Agreements."
|
G.
|
Relates to the remaining installments of for the acquisition of our five newbuilding vessels in 2015 and 2016. Please see "ITEM 7. Major Shareholders and Related Party Transactions - B. Related Party Transactions - Newbuilding Acquisitions". O
n March 19, 2015 we agreed with Hyundai Mipo to reschedule the second installment (amounting to $3.1 million) for vessel Hull no S417, originally due in the third quarter of 2015 to the second quarter of 2016.
|
|
·
|
First priority mortgage over M/T Stenaweco Energy;
|
|
·
|
Assignment of insurance and earnings of the mortgaged vessel;
|
|
·
|
Specific assignment of any time charter with duration of more than 12 months;
|
|
·
|
Corporate guarantee of Top Ships Inc.;
|
|
·
|
Pledge of the shares of the shipowning subsidiary;
|
|
·
|
Pledge over the earnings account of the vessel.
|
Year ending December 31,
|
Tranche A of the Termination Fee
|
Tranche B of the
Termination Fee
|
||||||
2015
|
1.1
|
-
|
||||||
2016
|
0.8
|
-
|
||||||
2017
|
1.5
|
0.8
|
||||||
|
3.4
|
0.8
|
Name
|
Age
|
Position
|
Evangelos J. Pistiolis
|
42
|
Director, President, Chief Executive Officer
|
Vangelis G. Ikonomou
|
50
|
Director, Executive Vice President and Chairman of the Board
|
Alexandros Tsirikos
|
41
|
Director, Chief Financial Officer
|
Demetris P. Souroullas
|
52
|
Chief Technical Officer
|
Konstantinos Karelas
|
42
|
Independent Non-Executive Director
|
Alexandros G. Economou
|
43
|
Independent Non-Executive Director
|
Per Christian Haukenes
|
40
|
Non-Independent Non-Executive Director
|
Paolo Javarone
|
43
|
Independent Non Executive Director
|
Name and Address of Beneficial Owner(1)
|
Number of Shares Owned
|
Percent of Class
|
||||||
Evangelos Pistiolis (2)
|
9,450,482
|
45.4
|
%
|
|||||
ALJ Capital Management, LLC(3)
|
2,500,000
|
12.0
|
% | |||||
Ronin Capital, LLC(4) | 1,694,982 | 8.1 | % | |||||
Vangelis G. Ikonomou
|
*
|
*
|
||||||
Alexandros Tsirikos
|
*
|
*
|
||||||
Demetris P. Souroullas
|
*
|
*
|
||||||
Executive Officers and Directors as a Group
|
9,464,996
|
45.5
|
% |
*
|
Less than one percent.
|
(1)
|
Unless otherwise indicated, the business address of each beneficial owner identified is c/o Top Ships Inc., 1 Vasilisis. Sofias and Megalou Alexandrou Str, 15124 Maroussi, Greece.
|
(2)
|
Mr. Pistiolis may be deemed to beneficially own these shares through Sovereign, Epsilon, Race Navigation and Oscar Shipholding, each a company wholly owned by Mr. Pistiolis. Pursuant to a Common Stock Purchase Agreement dated August 24, 2011, we issued to Sovereign 366,629 common shares on September 1, 2011 and 1,587,301 common shares on October 19, 2011. Please see "Certain Relationships and Related-Party Transactions—Sovereign Equity Line Transaction" for further details. On December 4, 2012, Sovereign sold, in three separate private transactions, 109,285 common shares at a price of $8.855 per share, 100,714 common shares at a price of $8.96 per share, and 107,142 common shares at a price of $8.89 per share. On December 6, 2012, Sovereign sold, in four separate private transactions, 64,965 common shares at a price of $9.17 per share, 61,428 common shares at a price of $9.17 per share, 93,630 common shares at a price of $9.10 per share, and 50,000 common shares at a price of $8.89 per share. On May 23, 2013, Sovereign sold, in a private transaction, 113,531 common shares at a price of $10.22 per share. Pursuant to Share Purchase Agreements entered into on March 19, 2014, we issued 2,216,871 common shares to Epsilon and 1,570,000 common shares to Oscar Shipholding on March 19, 2014. On June 6, 2014, Race Navigation acquired 2,500,000 of our common shares and 1,250,000 warrants immediately convertible to common shares in connection with our public offering. Pursuant to an award under our stock incentive plan we issued 1,830,000 restricted common shares to Tankers Family Inc. on April 27, 2015.
|
(3)
|
This information is derived from Schedule 13G filed with the SEC on February 17, 2015.
|
(4) |
This information is derived from Schedule 13G filed with the SEC on February 10, 2015.
|
|
·
|
100% of the share capital of Monte Carlo 37 Shipping Company Limited and Monte Carlo One Shipping Company Limited, entities affiliated with Mr. Pistiolis, which are
parties
to shipbuilding contracts with Hyundai Dockyard for the construction of Hull No. S418, a 39,000 dwt newbuilding product/chemical tanker scheduled for delivery in the third quarter of 2015, and Hull No. S407, a 50,000 dwt newbuilding product/chemical tanker scheduled for delivery in the first quarter of 2015, respectively, for an aggregate purchase price of $14.7 million. Monte Carlo 37 Shipping Company Limited and Monte Carlo One Shipping Company Limited are each party to a time charter agreement to commence upon the respective vessel's delivery. Concurrently, we agreed to terminate the MOA we had entered into on December 5, 2013, described above, with Monte Carlo 37 Shipping Company Limited for the acquisition of Hull No S418, and to apply the full amount of the deposit paid under the MOA, in the amount of $7.0 million, to reduce the purchase price under the share purchase agreement.
|
|
·
|
100% of the share capital of Monte Carlo Seven Shipping Company Limited, an entity affiliated with Mr. Pistiolis, which is party to a shipbuilding contract with Hyundai Dockyard for the construction of Hull No S414, a 50,000 dwt newbuilding product/chemical tanker scheduled for delivery in the second quarter of 2016, for a purchase price of $11.0 million. Monte Carlo Seven Shipping Company Limited is party to a time charter agreement to commence upon the vessel's delivery.
|
|
·
|
100% of the share capital of Monte Carlo LAX Shipping Company Limited, an entity affiliated with Mr. Pistiolis, which is party to a shipbuilding contract with Hyundai Dockyard for the construction of Hull No S417, a 50,000 dwt newbuilding product/chemical tanker scheduled for delivery in the third quarter of 2016, for a purchase price of $10.8 million. Monte Carlo LAX Shipping Company Limited is party to a time charter agreement to commence upon the vessel's delivery.
|
|
·
|
100% of the share capital of Monte Carlo 39 Shipping Company Limited, an entity affiliated with Mr. Pistiolis, which is party to a shipbuilding contract with Hyundai Dockyard for the construction of Hull No S419, a 39,000 dwt newbuilding product/chemical tanker scheduled for delivery in the first quarter of 2016, for a purchase price of $6.8 million. Monte Carlo 39 Shipping Company Limited is party to a time charter agreement to commence upon the vessel's delivery.
|
|
HIGH
|
LOW
|
||||||
For the Fiscal Year Ended December 31, 2014
|
$
|
8.68
|
$
|
1.01
|
||||
For the Fiscal Year Ended December 31, 2013
|
$
|
20.51
|
$
|
4.90
|
||||
For the Fiscal Year Ended December 31, 2012
|
$
|
36.40
|
$
|
6.16
|
||||
For the Fiscal Year Ended December 31, 2011
|
$
|
81.20
|
$
|
7.00
|
||||
For the Fiscal Year Ended December 31, 2010
|
$
|
91.00
|
$
|
43.40
|
For the Quarter Ended
|
|
|
June 30, 2015 (through April 27, 2015)
|
$
|
1.41
|
$
|
1.01
|
||||
March 31, 2015
|
$
|
1.79
|
$
|
0.96
|
||||
December 31, 2014
|
$
|
1.96
|
$
|
1.01
|
||||
September 30, 2014
|
$
|
2.25
|
$
|
1.75
|
||||
June 30, 2014
|
$
|
8.68
|
$
|
1.25
|
||||
March 31, 2014
|
$
|
14.77
|
$
|
8.47
|
||||
December 31, 2013
|
$
|
14.70
|
$
|
9.10
|
||||
September 30, 2013
|
$
|
20.51
|
$
|
9.17
|
||||
June 30, 2013
|
$
|
12.18
|
$
|
8.12
|
||||
March 31, 2013
|
$
|
10.85
|
$
|
4.90
|
For the Month
|
|
|
||||||
April (through April 27, 2015)
|
$
|
1.41
|
$
|
1.01
|
||||
March 2015
|
$
|
1.16
|
$
|
1.00
|
||||
February 2015
|
$
|
1.24
|
$
|
1.00
|
||||
January 2015
|
$
|
1.79
|
$
|
0.96
|
||||
December 2014
|
$
|
1.50
|
$
|
1.01
|
||||
November 2014
|
$
|
1.87
|
$
|
1.48
|
||||
October 2014
|
$
|
1.96
|
$
|
1.58
|
|
·
|
prior to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the Board approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder;
|
|
·
|
upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced;
|
|
·
|
at or subsequent to the date of the transaction that resulted in the shareholder becoming an interested shareholder, the business combination is approved by the Board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested shareholder; and
|
|
·
|
the shareholder became an interested shareholder prior to the consummation of the initial public offering.
|
|
(1)
|
we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States; and
|
|
(2)
|
either
|
|
(A)
|
more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (each such individual a "qualified shareholder" and such individuals collectively, "qualified shareholders"), which we refer to as the "50% Ownership Test," or
|
|
(B)
|
our stock is "primarily and regularly traded on an established securities market" in our country of organization, in another country that grants an "equivalent exemption" to U.S. corporations, or in the United States, which we refer to as the "Publicly-Traded Test."
|
|
·
|
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
|
·
|
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
|
|
·
|
is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust;
|
|
·
|
owns the common stock as a capital asset, generally, for investment purposes; and
|
|
·
|
owns less than 10% of our common stock for U.S. federal income tax purposes.
|
|
·
|
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
|
|
·
|
at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
|
·
|
the excess distribution or gain would be allocated ratably over the Non-Electing Holder's aggregate holding period for the common stock;
|
·
|
the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
|
·
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
|
·
|
the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
|
·
|
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
|
·
|
fail to provide an accurate taxpayer identification number;
|
|
·
|
are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or
|
|
·
|
in certain circumstances, fail to comply with applicable certification requirements.
|
|
·
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Company's management and directors; and
|
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
U.S. dollars in thousands,
|
Year Ended
|
|||||||
|
2013
|
2014
|
||||||
Audit Fees
|
120.8
|
343.7
|
|
·
|
Majority Independent Board.
Nasdaq requires, among other things, that a listed company has a Board of Directors comprised of a majority of independent directors. As permitted under Marshall Islands law, our Board of Directors is comprised of three independent directors, onenon-independent, non-executive director and three executive directors.
|
|
·
|
Audit Committee
. Nasdaqrequires, among other things, that a listed company has an audit committee with a minimum of three independent members, at least one of whom meets certain standards of financial sophistication. As permitted under Marshall Islands law, our audit committee consists of three independent directors but we do not designate any one audit commit member as meeting the standards of financial sophistication.
|
|
·
|
As a foreign private issuer, we are not required to hold regularly scheduled board meetings at which only independent directors are present.
|
|
·
|
In lieu of obtaining shareholder approval prior to the issuance of designated securities, we will comply with provisions of the BCA, which allows the Board of Directors to approve share issuances.
|
|
·
|
As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law and as provided in our bylaws, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us between 120 and 180 days advance notice to properly introduce any business at a meeting of shareholders.
|
Number
|
Description of Exhibits
|
|
1.1
|
Third Amended and Restated Articles of Incorporation of Top Ships Inc. (1)
|
|
1.2
|
Amended and Restated By-Laws of the Company, as adopted on February 28, 2007 (3)
|
|
2.1
|
Form of Share Certificate (2)
|
|
4.1
|
Top Ships Inc. Amended and Restated 2005 Stock Incentive Plan (4)
|
|
4.2
|
Stockholders Rights Agreement with Computershare Investor Services, LLC, as Rights Agent as of August 19, 2005 (5)
|
|
4.3
|
Amendment No. 1 to the Stockholders Rights Agreement with Computershare Investor Services, LLC, as Rights Agent, dated August 24, 2011 (7)
|
|
4.4
|
Form of bareboat commercial management agreement with Central Mare Inc. (Hongbo) (6)
|
|
4.5
|
Form of non-bareboat commercial management and technical management agreement with Central Mare Inc. (Amalfi) (6)
|
|
4.6
|
Form of technical management agreement with TMS Shipping Ltd. (Delos) (6)
|
|
4.7
|
Form of commercial management agreement with Central Mare Inc. (Delos) (6)
|
|
4.8
|
Form of commercial technical and commercial management agreement with International Ship Management Inc. (Delos) (8)
|
|
4.11
|
Shipping Financial Services Inc. Credit Facility dated July 1, 2011 (8)
|
|
4.12
|
Supplemental Agreement dated July 8, 2012 between Top Ships Inc. and Shipping Financial Services Inc. to the Credit Facility dated July 1, 2011 (9)
|
|
4.13
|
Central Mare Inc. Credit Facility dated July 16, 2011 (8)
|
|
4.14
|
Supplemental Agreement dated July 21, 2012 between Top Ships Inc. and Central Mare Inc. to the Credit Facility dated July 16, 2011 (9)
|
|
4.15
|
Common Stock Purchase Agreement with Sovereign Holdings Inc., dated as of August 24, 2011 (8)
|
|
4.16
|
Registration Rights Agreement with Sovereign Holdings Inc., dated as of August 24, 2011 (8)
|
|
4.17
|
Amended and Restated Loan Agreement, dated August 15, 2012 between Top Ships Inc. and Laurasia Trading Ltd. (9)
|
|
4.18
|
Addendum Number 1 dated August 15, 2012 to the Amended and Restated Loan Agreement dated August 15, 2012 between Top Ships Inc. and Laurasia Trading Ltd. (9)
|
|
4.19
|
Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect to Jeke Shipping Company Limited, Warhol Shipping Company Limited, Indiana R Shipping Company Limited and Britto Shipping Company Limited (10)
|
4.20
|
Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect to Hongbo Shipping Company Limited (10)
|
4.21
|
Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect to Lichtenstein Shipping Company Limited (10)
|
4.22
|
Amendment to Stock Purchase Agreement dated September 5, 2013, between Top Ships Inc. and AMCI Products Limited with respect to Lichtenstein Shipping Company Limited, dated October 10, 2013 (10)
|
4.23
|
Memorandum of Agreement dated December 5, 2013, between Top Ships Inc. and Monte Carlo 37 Shipping Company Limited (10)
|
4.24
|
Termination of Memorandum of Agreement dated December 5, 2013, between Top Ships Inc. and Monte Carlo 37 Shipping Company Limited, dated February 6, 2014 (10)
|
4.25
|
Memorandum of Agreement dated December 16, 2013, between Top Ships Inc. and Monte Carlo One Shipping Company Limited (10)
|
4.26
|
Memorandum of Agreement dated February 6, 2014, between Top Ships Inc. and Million Hope Maritime S.A. (10)
|
4.27
|
Commitment Letter dated October 16, 2014 between ABN AMRO BANK N.V. and Top Ships Inc.for a senior debt facility of up to $42 million
|
4.28
|
Senior debt facility dated June 19, 2014 between Alpha Bank and Monte Carlo 71 Shipping Company Limited
|
4.29 | Memorandum of Agreement dated December 30, 2014 with respect to the M/T Stenaweco Energy |
4.30 | Call Option Agreement dated December 30, 2014 with respect to the M/T Stenaweco Energy |
4.31 | Memorandum of Agreement dated December 30, 2014 with respect to the M/T Stenaweco Evolution |
4.32 | Call Option Agreement dated December 30, 2014 with respect to the M/T Stenaweco Evolution |
4.33 | Bareboat Charter dated December 30, 2014 with respect to the M/T Stenaweco Energy |
4.34 | Bareboat Charter dated December 30, 2014 with respect to the M/T Stenaweco Evolution |
4.35 | Loan Agreement dated January 2, 2015, between Top Ships Inc. and Atlantis Ventures, Ltd |
4.36
|
Sale and purchase Brokerage Agreements dated October 2, 2014 between Top Ships Inc. and Navis Finance AS
|
8.1
|
List of subsidiaries of the Company
|
12.1
|
Rule 13a-14(a)/15d-14(a) Certification of the Company's Principal Executive Officer
|
12.2
|
Rule 13a-14(a)/15d-14(a) Certification of the Company's Principal Financial Officer
|
13.1
|
Certification of the Company's Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
13.2
|
Certification of the Company's Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
The following materials from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2014, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2013 and 2014; (ii) Consolidated Statements of Comprehensive Income/ (Loss) for the years ended December 31, 2012, 2013 and 2014; (iii) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2013 and 2014; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013 and 2014; and (v) Notes to Consolidated Financial Statements
|
(1)
|
Incorporated by reference to the Company's Current Report on Form 6-K, filed on June 24, 2011
|
(2)
|
Incorporated by reference to the Company's Annual Report on Form 20-F, filed on June 29, 2009 (File No. 000-50859)
|
(3)
|
Incorporated by reference to the Company's Current Report on Form 6-K filed on March 9, 2007
|
(4)
|
Incorporated by reference to the Company's Annual Report on Form 20-F, filed on April 13, 2006 (File No. 000-50589)
|
(5)
|
Incorporated by reference to the Company's Registration Statement on Form 8-A (File No. 000-50859)
|
(6)
|
Incorporated by reference to the Company's Annual Report on Form 20-F, filed on April 12, 2011 (File No. 000-50859)
|
(7)
|
Incorporated by reference to Amendment No. 1 to the Company's Registration Statement on Form 8-A (File No. 000-50859)
|
(8)
|
Incorporated by reference to the Company's Annual Report on Form 20-F, filed on April 11, 2012 (File No. 000-50859)
|
(9)
|
Incorporated by reference to the Company's Annual Report on Form 20-F, filed on May 1, 2013 (File No. 000-50859)
|
(10)
|
Incorporated by reference to the Company's Annual Report on Form 20-F, filed on February 14, 2014 (File No. 000-50859)
|
|
TOP SHIPS INC.
|
|
|
(Registrant)
|
|
|
|
|
Date:
April 29,
2015
|
By:
|
/s/ Evangelos Pistiolis
|
|
|
Evangelos Pistiolis
|
|
|
President, Chief Executive Officer, and Director
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Consolidated Balance Sheets as of December 31, 2013 and 2014
|
F-3
|
|
|
Consolidated Statements of Comprehensive (Loss)/Income for the years ended December 31, 2012, 2013 and 2014
|
F-4
|
|
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2013 and 2014
|
F-5
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013 and 2014
|
F-6
|
|
|
Notes to Consolidated Financial Statements
|
F-9
|
Schedule I- Condensed Financial Information of Top Ships Inc. (Parent Company Only) | F-33 |
TOP SHIPS INC.
|
CONSOLIDATED BALANCE SHEETS
|
DECEMBER 31, 2013 AND 2014
|
|
(Expressed in thousands of U.S. Dollars - except share and per share data)
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
|
Accumulated
|
|
|
||||||||||||||||||||
|
Additional
|
Other
|
|
|
||||||||||||||||||||
Common Stock
|
Paid-in
|
Comprehensive
|
Accumulated
|
|||||||||||||||||||||
# of Shares
|
Par Value
|
Capital
|
(Loss)/Income
|
Deficit
|
Total
|
|||||||||||||||||||
BALANCE, December 31, 2011
|
2,449,648
|
24
|
292,730
|
37
|
(216,107
|
)
|
76,684
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(63,984
|
)
|
(63,984
|
)
|
||||||||||||||||
Stock-based compensation (Note 14)
|
-
|
- |
379
|
-
|
- |
379
|
||||||||||||||||||
BALANCE, December 31, 2012
|
2,449,648
|
24
|
293,109
|
37
|
(280,091
|
)
|
13,079
|
|||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
1,408
|
1,408
|
||||||||||||||||||
Stock-based compensation (Note 14)
|
20,000
|
1
|
344
|
-
|
-
|
345
|
||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(37
|
)
|
-
|
(37
|
)
|
||||||||||||||||
BALANCE, December 31, 2013
|
2,469,648
|
25
|
293,453
|
-
|
(278,683
|
)
|
14,795
|
|||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
2,896
|
2,896
|
||||||||||||||||||
Stock-based compensation (Note 14)
|
7,142
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Issuance of common stock, net (Note 13)
|
16,493,214
|
165
|
52,919
|
-
|
-
|
53,084
|
||||||||||||||||||
Excess of consideration over acquired assets (Note 1)
|
-
|
-
|
(28,246
|
)
|
-
|
-
|
(28,246
|
)
|
||||||||||||||||
Cancellation of fractional shares
|
(15
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||
BALANCE, December 31, 2014
|
18,969,989
|
190
|
318,126
|
-
|
(275,787
|
)
|
42,529
|
|||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
TOP SHIPS INC.
|
|
|
|
|||||||||
|
|
|
|
|||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|||||||||
FOR THE YEARS ENDED DECEMBER 31, 2012, 2013 AND 2014
|
|
|
|
|||||||||
|
|
|
|
|||||||||
(Expressed in thousands of U.S. Dollars)
|
|
|
|
|||||||||
|
|
|
|
|||||||||
|
2012
|
2013
|
2014
|
|||||||||
Cash Flows from Operating Activities:
|
|
|
|
|||||||||
|
|
|
|
|||||||||
Net (loss)/income
|
(63,984
|
)
|
1,408
|
2,896
|
||||||||
Adjustments to reconcile net (loss)/income to net cash
|
||||||||||||
provided by/(used in) operating activities:
|
||||||||||||
Depreciation (Notes 5 and 10)
|
12,510
|
6,763
|
877
|
|||||||||
Amortization and write off of deferred financing costs (Note 17)
|
1,437
|
1,815
|
16
|
|||||||||
Amortization of debt discount
|
371
|
-
|
-
|
|||||||||
Translation gain of foreign currency denominated loan and unrealized foreign exchange differences
|
70
|
-
|
5
|
|||||||||
Provision for service leaving indemnities
|
- |
(37
|
)
|
-
|
||||||||
Stock-based compensation expense (Note 14)
|
378
|
345
|
-
|
|||||||||
Change in fair value of derivative financial instruments (Note 19)
|
(2,656
|
)
|
(2,313
|
)
|
(4,442
|
)
|
||||||
Loss on sale of other fixed assets
|
178
|
3
|
5
|
|||||||||
Gain on sale of vessels
|
-
|
(14
|
)
|
-
|
||||||||
Gain on disposal of subsidiaries (Note 20)
|
-
|
(1,591
|
)
|
-
|
||||||||
Vessels impairment charge (Note 5)
|
61,484
|
-
|
-
|
|||||||||
Provision for doubtful accounts
|
256
|
-
|
-
|
|||||||||
(Increase)/Decrease in:
|
||||||||||||
Trade accounts receivable
|
1,281
|
384
|
(50
|
)
|
||||||||
Insurance claims
|
4
|
-
|
-
|
|||||||||
Inventories
|
-
|
-
|
(324
|
)
|
||||||||
Advances to various creditors
|
105
|
9
|
(4
|
)
|
||||||||
Prepayments and other
|
462
|
571
|
(215
|
)
|
||||||||
Due from related parties
|
74
|
-
|
(25
|
)
|
||||||||
Other long term receivable
|
1,841
|
-
|
-
|
|||||||||
Increase/(Decrease) in:
|
||||||||||||
Due to related parties
|
587
|
(1,343
|
)
|
(445
|
)
|
|||||||
Accounts payable
|
(4,426
|
)
|
(1,650
|
)
|
(311
|
)
|
||||||
Other non-current liabilities
|
4,706
|
(800
|
)
|
(800
|
)
|
|||||||
Accrued liabilities
|
(136
|
)
|
(480
|
)
|
14
|
|||||||
Unearned revenue
|
587
|
-
|
-
|
|||||||||
|
||||||||||||
Net Cash provided by/(used in) Operating Activities
|
15,129
|
3,070
|
(2,803
|
)
|
||||||||
|
||||||||||||
Cash Flows from Investing Activities:
|
||||||||||||
|
||||||||||||
Advances for vessels under construction (Note 4)
|
-
|
(14,400
|
)
|
(45,911
|
)
|
|||||||
Decrease in restricted cash
|
5,949
|
2,563
|
1,575
|
|||||||||
Net proceeds from sale of vessels (Note 5)
|
-
|
25,214
|
-
|
|||||||||
Net proceeds from disposal of subsidiaries (Note 20)
|
-
|
37,552
|
-
|
|||||||||
Net proceeds from sale of other fixed assets
|
60
|
65
|
-
|
|||||||||
Acquisition of other fixed assets
|
(7
|
)
|
-
|
(114
|
)
|
|||||||
|
||||||||||||
Net Cash provided by/(used in) Investing Activities
|
6,002
|
50,994
|
(44,450
|
)
|
||||||||
|
||||||||||||
Cash Flows from Financing Activities:
|
||||||||||||
|
||||||||||||
Proceeds from debt (Note 11)
|
500
|
-
|
20,125
|
|||||||||
Principal payments of debt
|
(16,656
|
)
|
(11,120
|
)
|
(706
|
)
|
||||||
Prepayment of debt
|
(4,975
|
)
|
(30,326
|
)
|
-
|
|||||||
Derivative financial instrument termination payments
|
-
|
-
|
(1,134
|
)
|
||||||||
Proceeds from issuance of common stock, net of underwriters fees
|
-
|
-
|
20,191
|
|||||||||
Follow-on offering issuance costs
|
- | - |
(710
|
)
|
||||||||
Payment of financing costs
|
-
|
(2,837
|
)
|
(219
|
)
|
|||||||
|
||||||||||||
Net Cash (used in)/provided by Financing Activities
|
(21,131
|
)
|
(44,283
|
)
|
37,547
|
|||||||
|
||||||||||||
|
||||||||||||
Net increase/(decrease) in cash and cash equivalents
|
-
|
9,781
|
(9,706
|
)
|
||||||||
|
||||||||||||
Cash and cash equivalents at beginning of year
|
-
|
-
|
9,706
|
|||||||||
Effect of exchange rate changes on cash
|
-
|
(75
|
)
|
-
|
||||||||
|
||||||||||||
Cash and cash equivalents at end of the year
|
-
|
9,706
|
-
|
|||||||||
|
||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||
|
||||||||||||
Interest paid net of capitalized interest
|
6,837
|
5,621
|
284
|
|||||||||
Offering expenses included in liabilities
|
-
|
-
|
752
|
|||||||||
Shares issued as consideration for acquisition of vessels (Note 1)
|
-
|
-
|
40,833
|
|||||||||
Advances to shipyards before acquisition of vessels (Note 1)
|
-
|
-
|
22,087
|
1. | Basis of Presentation and General Information: |
|
Companies
|
Date of
Incorporation
|
Country of
Incorporation
|
Activity
|
1
|
Top Tanker Management Inc.
|
May 2004
|
Marshall Islands
|
Management company
|
2
|
Lyndon International Co.
|
October 2013
|
Marshall Islands
|
Non vessel-owning subsidiary company
|
|
Shipowning Companies with vessels in operations during
years ended December 31, 2012, 2013 and 2014
|
Date of
Incorporation
|
Country of
Incorporation
|
Vessel
|
|
1
|
Monte Carlo 71 Shipping Company Limited
|
June 2014
|
Marshall Islands
|
M/T Stenaweco Energy (acquired June 2014) (Notes 4 and 5)
|
|
2
|
Monte Carlo One Shipping Company Ltd
|
June 2012
|
Marshall Islands
|
Hull No 407 (Subsequently renamed to M/T/ Stenaweco Evolution) (acquired March 2014) (Note 4)
|
|
3
|
Monte Carlo Seven Shipping Company Limited
|
April 2013
|
Marshall Islands
|
Hull No S414 (acquired March 2014) (Note 4)
|
|
4
|
Monte Carlo Lax Shipping Company Limited
|
May 2013
|
Marshall Islands
|
Hull No S417 (acquired March 2014) (Note 4)
|
|
5
|
Monte Carlo 37 Shipping Company Limited
|
September 2013
|
Marshall Islands
|
Hull No S418 (acquired March 2014) (Note 4)
|
|
6
|
Monte Carlo 39 Shipping Company Limited
|
December 2013
|
Marshall Islands
|
Hull No S419 (acquired March 2014 ) (Note 4)
|
|
7
|
Jeke Shipping Company Limited ("Jeke")
|
July 2007
|
Liberia
|
M/V Evian (acquired February 2008, sold October 2013) (Note 5)
|
|
8
|
Warhol Shipping Company Limited ("Warhol")
|
July 2008
|
Liberia
|
M/T Miss Marilena (delivered February 2009, sold October 2013) (Note 5)
|
|
9
|
Lichtenstein Shipping Company Limited ("Lichtenstein")
|
July 2008
|
Liberia
|
M/T Lichtenstein (delivered February 2009, sold October 2013) (Note 5)
|
|
10
|
Indiana R Shipping Company Limited ("Indiana R")
|
July 2008
|
Liberia
|
M/T UACC Shams (delivered March 2009, sold October 2013) (Note 5)
|
|
11
|
Britto Shipping Company Limited ("Britto")
|
July 2008
|
Liberia
|
M/T Britto (delivered May 2009, sold October 2013) (Note 5)
|
|
12
|
Hongbo Shipping Company Limited ("Hongbo")
|
July 2008
|
Liberia
|
M/T Hongbo (delivered August 2009, sold October 2013) (Note 5)
|
|
13
|
Banksy Shipping Company Limited ("Banksy")
|
July 2008
|
Liberia
|
M/T UACC Sila (delivered March 2009 , sold April 2013) (Note 5)
|
Consideration in 5,833,214 newly issued common shares
|
40,833
|
|||
Consideration in cash
|
2,500
|
|||
Consideration already advanced for Hull No S418
|
7,000
|
|||
Total consideration
|
50,333
|
|||
Less: Net assets of companies acquired
|
(22,087
|
)
|
||
Excess of consideration over acquired assets
|
28,246
|
2. | Significant Accounting Policies: |
(a) | Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), after effect to the transfer of assets from entities under common control in 2014, as described in Note 1 to the consolidated financial statements, and include the accounts and operating results of Top Ships Inc. and its wholly-owned subsidiaries referred to in Note 1. Intercompany balances and transactions have been eliminated on consolidation. |
(b) | Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical estimates mainly include impairment of vessels, vessel useful lives and residual values, provision for doubtful accounts and fair values of derivative instruments. |
(c) | Foreign Currency Translation: The Company's functional currency is the U.S. Dollar because all vessels operate in international shipping markets, and therefore primarily transact business in U.S. Dollars. The Company's books of account are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies are translated to U.S. Dollars based on the year-end exchange rates and any gains and losses are included in the statement of comprehensive income. |
(d) | Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. |
(e) | Restricted Cash: The Company considers amounts that are pledged, blocked, held as cash collateral, required to be maintained with a specific bank or be maintained by the Company as minimum cash under the terms of a loan agreement, as restricted and these amounts are presented separately on the balance sheets. In the event original maturities are shorter than twelve months, such deposits are presented as current assets while if original maturities are longer than twelve months, such deposits are presented as non-current assets. |
(f) | Trade Accounts Receivable, net: Trade receivables are measured at amortized cost using the effective interest method, less any impairment. Normally the interest element could be disregarded since the receivables are short term. The amount shown as trade accounts receivable, net at each balance sheet date, includes estimated recoveries from charterers for hire, freight and demurrage billings, net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually, combined with the application of a historical recoverability ratio, for purposes of determining the appropriate provision for doubtful accounts. Provision for doubtful accounts at December 31, 2013 and 2014 totaled $574 and $0 respectively, and is summarized as follows: |
|
Provision for doubtful accounts
|
|||
Balance, December 31, 2012
|
576
|
|||
—Additions
|
18
|
|||
—Reversals / write-offs
|
(20
|
)
|
||
Balance, December 31, 2013
|
574
|
|||
—Additions
|
-
|
|||
—Reversals / write-offs
|
(574
|
)
|
||
Balance, December 31, 2014
|
-
|
(g) | Inventories: Inventories consist of lubricants and stores on board the vessels. Inventories may also consist of bunkers when vessels are unemployed or are operating in the spot market. Inventories are stated at the lower of cost or market. Cost, which consists of the purchase price, is determined by the first in, first out method. |
(h) | Vessel Cost: Vessels are stated at cost, which consists of the contract price, pre-delivery costs incurred during the construction of new buildings, capitalized interest and any material expenses incurred upon acquisition (improvements and delivery costs). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Repairs and maintenance are charged to expense as incurred and are included in Vessel operating expenses in the accompanying consolidated statements of comprehensive (loss)/income. |
(i) | Impairment of Long-Lived Assets: The Company reviews its long-lived assets held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for an impairment loss. If the asset's carrying amount is not recoverable from its probability weighted undiscounted cash flows the asset's carrying amount is reduced to its fair value. In this respect, management regularly reviews the carrying amount of the vessels in connection with the estimated recoverable amount for each of the Company's vessels. |
(j) | Vessel Depreciation: Depreciation is calculated using the straight-line method over the estimated useful life of the vessels, after deducting the estimated salvage value. Each vessel's salvage value is equal to the product of its lightweight tonnage and estimated scrap rate which up until March 31, 2014 was estimated to be $160 per lightweight ton. Effective April 1, 2014, the Company revised its scrap rate estimate from $160 to $300 per lightweight ton in order to align the scrap rate estimate with the current historical average scrap prices and to better reflect current market conditions. The change in accounting estimate has been applied prospectively. The effect of the increase in the estimated scrap rate was to increase net income by $32. Earnings per share, basic and diluted, for the year ended December 31, 2014 were not affected. Management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its useful life is adjusted at the date such regulations are adopted. |
(k) | Long Lived Assets Held for Sale and Discontinued Operations: The Company classifies vessels as being held for sale when the following criteria are met: (a) management, having the authority to approve the action, commits to a plan to sell the asset, (b) the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, (c) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated, (d) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale, within one year, (e) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, (f) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
(l) | Other Fixed Assets, Net: Other fixed assets, net, consist of furniture, office equipment, cars and leasehold improvements, stated at cost, which consists of the purchase/contract price less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets as presented below: |
Description
|
Useful Life (years)
|
||
Leasehold improvements
|
Until the end of the lease term (December 2024)
|
||
Cars
|
6 | ||
Office equipment
|
5 | ||
Furniture and fittings
|
5 | ||
Computer equipment
|
3 |
(m) | Accounting for Dry-Docking Costs: All dry-docking costs are accounted for under the direct expense method, under which they are expensed as incurred and are reflected separately in the accompanying consolidated statements of comprehensive (loss)/income. |
(n) | Financing Costs: Fees incurred and paid to the lenders for obtaining new loans or refinancing existing ones are capitalized as deferred finance charges and such fees are amortized to interest expense over the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinanced are expensed when a repayment or refinancing is made and charged to interest and finance costs. |
(o) | Pension and Retirement Benefit Obligations—Crew: The ship-owning companies included in the consolidation employ the crew on board under short-term contracts (usually up to nine months) and accordingly, they are not liable for any pension or post-retirement benefits. |
(p) | Accounting for Revenue and Expenses: Revenues are generated from bareboat charter, time charter, voyage charter agreements and pool arrangements. A bareboat charter is a contract in which the vessel owner provides the vessel to the charterer for a fixed period of time at a specified daily rate, which is generally payable monthly in advance, and the customer generally assumes all risks and costs of operation during the charter term. A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable monthly in advance. Such contracts may include profit sharing arrangements under which the excess between an agreed daily base rate and the actual rate generated by the vessel every quarter, if any, is settled and recorded on a quarterly basis. Under a voyage charter, revenue, including demurrage and associated voyage costs, with the exception of port expenses which are recorded as incurred, are recognized on a proportionate performance method over the duration of the voyage. A voyage is deemed to commence upon the latest between the completion of discharge of the vessel's previous cargo and the charter party date of the current voyage and is deemed to end upon the completion of discharge of the current cargo. Demurrage income represents payments by the charterer to the Company when loading or discharging time exceeded the stipulated time in the voyage charter. Vessel operating expenses are expensed as incurred. Unearned revenue represents cash received prior to year-end related to revenue applicable to periods after December 31 of each year. Under a pool arrangement, the pool charters-in a vessel on a time charter basis but the daily charter hire is not fixed but it depends on the total return that the pool is able to achieve by operating all its vessels in the spot market. |
(q) | Stock Incentive Plan: All share-based compensation related to the grant of restricted and/or unrestricted shares provided to employees and to non-employee directors for their services provided is included in general and administrative expenses in the consolidated statements of comprehensive (loss)/income. The shares that do not contain any future service vesting conditions are considered vested shares and recognized in full on the grant date. The shares that contain a time-based service vesting condition are considered non-vested shares on the grant date and recognized on a straight-line basis over the vesting period. The shares, vested and non-vested, are measured at fair value which is equal to the market value of the Company's common stock on the grant date. |
(r) | Earnings / (Loss) per Share: Basic earnings/(loss) per share are computed by dividing net income or loss available to common stockholders' by the weighted average number of common shares deemed outstanding during the year. Diluted earnings/(loss) per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised. For purposes of calculating diluted earnings per share the denominator of the diluted earnings per share calculation includes the incremental shares assumed issued under the treasury stock method weighted for the period the non-vested shares were outstanding, with the exception of the 21,034 shares, granted to the Company's Chief Executive Officer, which will vest in the event of change of control. The computation of diluted earnings per share also reflects the potential dilution that could occur if warrants to issue common stock were exercised, to the extent that they are dilutive, using the treasury stock method. |
(s) | Related Parties : The Company considers as related parties: the affiliates of the Company; entities for which investments are accounted for by the equity method; principal owners of the Company; its management; members of the immediate families of principal owners of the Company; and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Another party is also a related party if it can significantly influence the management or operating policies of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. An Affiliate is a party that, directly or indirectly through one or more intermediaries, controls, is controlled by, or has common control with the Company. Control is the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an enterprise through ownership, by contract and otherwise. Immediate Family is family members whom a principal owner or a member of management might control or influence or by whom they might be controlled or influenced because of the family relationship. Management is the persons who are responsible for achieving the objectives of the Company and who have the authority to establish policies and make decisions by which those objectives are to be pursued. Management normally includes members of the board of directors, the Chief Executive Officer, the Chief Financial Officer, Vice President and Chief Technical Officer in charge of principal business functions and other persons who perform similar policy making functions. Persons without formal titles may also be members of management. Principal owners are owners of record or known beneficial owners of more than 10% of the voting interests of the Company. |
(t) | Derivatives and Hedging : The Company records every derivative instrument (including certain derivative instruments embedded in other contracts) in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivatives' fair value recognized currently in earnings unless specific hedge accounting criteria are met. The Company has not applied hedge accounting for its derivative instruments during the periods presented. |
(u) | Financial liabilities: Financial liabilities are classified as either financial liabilities at 'fair value through the profit and loss' ("FVTPL") or 'other financial liabilities'. Financial instruments classified as FVTPL are recognized at fair value in the balance sheet when the Company has an obligation to perform under the contractual provisions of those instruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Changes in the financial instruments are recognized in earnings, except in the cases where these financial instruments fall under the guidance in ASC 815-40, where they are initially classified in equity and are initially measured at fair value in permanent equity and subsequent changes in fair value are not subsequently measured. Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortized cost using the effective interest rate method. |
(v) | Interest rate risk: The Company is subject to market risks relating to changes in interest rates due to debt outstanding under the loan facility with Alpha Bank on which it pays interest based on LIBOR plus a margin. In order to manage part or whole of its exposure to changes in interest rates due to this floating rate indebtedness, the Company might enter into interest rate swap agreements. Furthermore the Company is exposed to floating interest rates in relation to the outstanding balance of the termination fee outstanding. |
(w) | Credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions with which it places its temporary cash investments. |
(x) | Fair value: The carrying values of accounts receivable, prepaid expenses, other receivables, accounts payable, due to/from related parties and accrued liabilities are reasonable estimates of their fair value due to the short-term nature of these financial instruments. Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short term maturities. The Company considers its creditworthiness when determining the fair value of the credit facilities. The fair value of bank debt approximates the recorded value due to its variable interest rate, being the LIBOR. LIBOR rates are observable at commonly quoted intervals for the full terms of the loans and, hence, bank loans are considered level 2 items in accordance with the fair value hierarchy. The carrying value of the termination fee outstanding differs from its fair value which the Company derived by employing unobservable inputs that are corroborated by market data (level 2). The fair value of interest rate swaps is determined using a discounted cash flow method taking into account current and future interest rates and the creditworthiness of both the financial instrument counterparty and the Company. The fair value of warrants is determined using the Cox, Ross and Rubinstein Binomial methodology. |
(y) | Recent Accounting Pronouncements: In April 2014, the FASB issued ASU 2014-08 "Presentation of Financial Statements and Property, Plant and Equipment" changing the presentation of discontinued operations on the statements of income and other requirements for reporting discontinued operations. Under the new standard, a disposal of a component or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component meets the criteria to be classified as held-for-sale or is disposed. The amendments in this update also require additional disclosures about discontinued operations and disposal of an individually significant component of an entity that does not qualify for discontinued operations. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2014. We plan to adopt ASU 2014-08 effective January 1, 2015 and do not expect that the adoption will have a significant effect on our financial statements. |
(z) | Segment Reporting: The Chief Operating Decision Marker ("CODM") receives financial information and evaluates the Company's operations by charter revenues and not by the length, type of vessel or type of ship employment for its customers (i.e. time or bareboat charters) or by geographical region as the charterer is free to trade the vessel worldwide and as a result, the disclosure of geographic information is impracticable. The CODM does not use discrete financial information to evaluate the operating results for each such type of charter or vessel. Although revenue can be identified for these types of charters or vessels, management cannot and does not identify expenses, profitability or other financial information for these various types of charters or vessels. As a result, management, including the CODM, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it operates as one reportable segment. |
3. | Going Concern: |
4. | Advances for Vessels Acquisitions / Under Construction: |
• | 100% of the share capital of Monte Carlo 37 Shipping Company Limited and Monte Carlo One Shipping Company Limited, entities affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis, which are party to shipbuilding contracts with Hyundai Mipo Dockyard Co. for the construction of Hull No S418, a 39,000 dwt newbuilding product/chemical tanker scheduled for delivery in the third quarter of 2015, and Hull No S407 (subsequently renamed to M/T Stenaweco Evolution), a 50,000 dwt newbuilding product/chemical tanker scheduled for delivery in the first quarter of 2015, respectively, for an aggregate purchase price of $14,693. Monte Carlo 37 Shipping Company Limited and Monte Carlo One Shipping Company Limited are each party to a time charter agreement to commence upon the respective vessel's delivery. Upon its delivery Hull No S407 will enter into a time charter agreement with Stena Weco A/S and Hull No S418 will enter into a time charter agreement with BP Shipping Limited. Concurrently, the Company agreed to terminate the MOA entered into on December 5, 2013, described above, with Monte Carlo 37 Shipping Company Limited for the acquisition of Hull No S418, and to apply the full amount of the deposit paid under the MOA, in the amount of $7,000, to reduce the purchase price under the share purchase agreement. |
• | 100% of the share capital of Monte Carlo Seven Shipping Company Limited, an entity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis, which is party to a shipbuilding contract with Hyundai Mipo Dockyard Co. for the construction of Hull No S414, a 50,000 dwt newbuilding product/chemical tanker scheduled for delivery in the second quarter of 2016, for a purchase price of $10,990.The vessel upon its delivery will enter into a time charter agreement with Stena Weco A/S. |
• | 100% of the share capital of Monte Carlo Lax Shipping Company Limited, an entity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis, which is party to a shipbuilding contract with Hyundai Mipo Dockyard Co. for the construction of Hull No S417, a 50,000 dwt newbuilding product/chemical tanker scheduled for delivery in the third quarter of 2016, for a purchase price of $10,820. The vessel will enter upon delivery into a time charter agreement with Dampskibsselskabet NORDEN A/S. |
• | 100% of the share capital of Monte Carlo 39 Shipping Company Limited, an entity affiliated with the Company's President, Chief Executive Officer and Director, Evangelos J. Pistiolis, which is party to a shipbuilding contract with Hyundai Mipo Dockyard Co. for the construction of Hull No S419, a 39,000 dwt newbuilding product/chemical tanker scheduled for delivery in the first quarter of 2016, for a purchase price of $6,830. Upon its delivery Hull No S419 will enter into a time charter agreement with BP Shipping Limited. |
Vessel
|
Yard Installments
|
Capitalized Expenses
|
Carrying Amount
|
|||||||||
Hull No S407 (M/T Stenaweco Evolution)
|
8,050
|
894
|
8,944
|
|||||||||
Hull No S418
|
7,825
|
430
|
8,255
|
|||||||||
Hull No S419
|
7,825
|
120
|
7,945
|
|||||||||
Hull No S414
|
4,590
|
10
|
4,600
|
|||||||||
Hull No S417
|
4,622
|
9
|
4,631
|
|||||||||
Total
|
32,912
|
1,463
|
34,375
|
5. | Vessels, net: |
|
Vessel Cost
|
Accumulated Depreciation
|
Net Book Value
|
|||||||||
Balance, December 31, 2012
|
177,292
|
-
|
177,292
|
|||||||||
— Depreciation
|
-
|
(6,429
|
)
|
(6,429
|
)
|
|||||||
— Disposals
|
(177,292
|
)
|
6,429
|
(170,863
|
)
|
|||||||
Balance, December 31, 2013
|
-
|
-
|
-
|
|||||||||
— Depreciation
|
-
|
(757
|
)
|
(757
|
)
|
|||||||
— Additions
|
38,957
|
-
|
38,957
|
|||||||||
Balance, December 31, 2014
|
38,957
|
(757
|
)
|
38,200
|
6. | Transactions with Related Parties: |
(a | Central Mare Inc. ("Central Mare") – Letter Agreement and Management Agreements: From July 1, 2010 to March 10, 2014, Central Mare had been performing all operational, technical and commercial functions relating to the chartering and operation of the Company's vessels, pursuant to a letter agreement, or the Letter Agreement, concluded between Central Mare, a related party controlled by the family of the Company's Chief Executive Officer, and the Company, as well as management agreements concluded between Central Mare and the Company's vessel-owning subsidiaries. Furthermore, the Letter Agreement provided for the provision of services in connection with compliance with Section 404 of the Sarbanes-Oxley Act of 2002, services rendered in relation to the Company's maintenance of proper books and records, services in relation to the financial reporting requirements of the Company under SEC and NASDAQ rules and regulations and information-system related services. |
(b) | Central Mare– Executive Officers and Other Personnel Agreements: On September 1, 2010, the Company entered into separate agreements with Central Mare pursuant to which Central Mare provides the Company with its executive officers (Chief Executive Officer, Chief Financial Officer, Chief Technical Officer and Executive Vice President). |
Year Ended December 31,
|
|||||||||||||
2012
|
2013
|
2014
|
Presented in:
|
||||||||||
Management fees
|
2,345
|
505
|
33
|
Management fees - related party - Statement of comprehensive (loss)/income
|
|||||||||
Executive officers and other personnel expenses
|
2,349
|
1,760
|
840
|
General and administrative expenses - Statement of comprehensive (loss)/income
|
|||||||||
Superintendent fees
|
29
|
-
|
-
|
Vessel operating expenses - Statement of comprehensive (loss)/income
|
|||||||||
Commission for sale of vessels
|
-
|
260
|
-
|
Gain on sale of vessels - Statement of comprehensive (loss)/income
|
|||||||||
Commission on charter hire agreements
|
275
|
150
|
-
|
Voyage expenses - Statement of comprehensive (loss)/income
|
|||||||||
Management agreement termination fees
|
-
|
846
|
-
|
Management fees - related party - Statement of comprehensive (loss)/income
|
|||||||||
Total
|
4,998
|
3,521
|
873
|
|
(c) | Newbuilding vessel acquisitions from affiliated entities: From December 5, 2013 to March 19, 2014 the Company entered into a series of transactions with a number of entities affiliated with our President, Chief Executive Officer and Director, Evangelos J. Pistiolis that led to the purchase of our fleet of newbuilding vessels (see Note 4). |
(d) | Central Shipping Monaco SAM ("CSM") – Letter Agreement and Management Agreements: On March 10, 2014, the Company entered into a new letter agreement, or the New Letter Agreement, with CSM, a related party controlled by President, Chief Executive Officer and Director, Evangelos J. Pistiolis, and on March 10, 2014 and June 18, 2014 the Company entered into management agreements, or Management Agreements, between CSM and our vessel-owning subsidiaries respectively. The New Letter Agreement can only be terminated subject to an eighteen-month advance notice, subject to a termination fee equal to twelve months of fees payable under the New Letter Agreement. |
Year Ended December 31,
|
|||||||||||||
2012
|
2013
|
2014
|
Presented in:
|
||||||||||
-
|
-
|
50
|
Capitalized under Vessels, net – Balance sheet
|
||||||||||
Technical management fees
|
Management fees - related parties -Statement of
|
||||||||||||
-
|
-
|
166
|
comprehensive (loss)/income
|
||||||||||
Supervision services costs and fees
|
-
|
-
|
500
|
Capitalized under Advances for vessels acquisitions / under construction –Balance sheet
|
|||||||||
-
|
-
|
31
|
Vessel operating expenses -Statement of comprehensive
|
||||||||||
Superintendent fees
|
(loss)/income
|
||||||||||||
-
|
-
|
18
|
Capitalized under Advances for vessels acquisitions / under construction –Balance sheet
|
||||||||||
-
|
-
|
104
|
Management fees - related parties -Statement of
|
||||||||||
Accounting and reporting cost
|
comprehensive (loss)/income
|
||||||||||||
-
|
-
|
10
|
Capitalized under Prepayments and other – Balance sheet
|
||||||||||
Financing fees
|
-
|
-
|
40
|
Capitalized under Deferred charges – Balance sheet
|
|||||||||
Commission for sale and purchase of vessels
|
-
|
-
|
383
|
Capitalized under Vessels, net – Balance sheet
|
|||||||||
Commission on charter hire agreements
|
-
|
-
|
46
|
Voyage expenses - Statement of comprehensive (loss)/income
|
|||||||||
Performance incentive fee
|
-
|
-
|
400
|
Management fees - related parties - Statement of comprehensive (loss)/income
|
|||||||||
Total
|
-
|
-
|
1,748
|
||||||||||
7. | Leases: |
Year ending December 31,
|
Office Lease
|
|||
2015
|
36
|
|||
2016
|
36
|
|||
2017
|
36
|
|||
2018
|
36
|
|||
2019
|
36
|
|||
2020 and thereafter
|
180
|
|||
Total
|
360
|
Year ending December 31,
|
Time Charter receipts
|
|||
2015
|
6,023
|
|||
2016
|
6,039
|
|||
2017
|
6,023
|
|||
2018
|
3,267
|
|||
Total
|
21,352
|
8. | Prepayments and other: |
|
December 31, 2013
|
December 31, 2014
|
||||||
Prepaid expenses
|
54
|
293
|
||||||
Interest receivable
|
124
|
-
|
||||||
Guarantees
|
21
|
399
|
||||||
Other receivables
|
319
|
94
|
||||||
Total
|
518
|
786
|
9. | Inventories: |
December 31, 2013
|
December 31, 2014
|
|||||||
Lubricants
|
-
|
308
|
||||||
Consumable stores
|
-
|
16
|
||||||
-
|
324
|
10. | Other fixed assets: |
11. | Debt: |
Current portion of long term debt
|
1,412
|
|||
Long term debt
|
18,007
|
|||
Total
|
19,419
|
· | First priority mortgage over M/T Stenaweco Energy; |
· | Assignment of insurance and earnings of the mortgaged vessel; |
· | Specific assignment of any time charter with duration of more than 12 months; |
· | Corporate guarantee of Top Ships Inc.; |
· | Pledge of the shares of the shipowning subsidiary; |
· | Pledge over the earnings account of the vessel. |
Years
|
||||
December 31, 2015
|
1,412
|
|||
December 31, 2016
|
1,412
|
|||
December 31, 2017
|
1,412
|
|||
December 31, 2018
|
1,412
|
|||
December 31, 2019
|
1,412
|
|||
December 31, 2020 and thereafter
|
12,359
|
|||
Total
|
19,419
|
12. | Commitments and Contingencies: |
13. | Common Stock, Additional Paid-In Capital and Dividends: |
· | Issuance of common shares: if the Company issues or sells any common shares for a consideration per share less than the exercise price of the warrants then the latter shall be reduced to match the reduced consideration per share. |
· | Issuance of options or convertible securities: if the Company issues or sells any options at a strike price that is lower than the exercise price of the warrants then the latter will be reduced to match the strike price of the options. If the Company issues convertibles that end up converting at a price per share that is lower than the exercise price of the warrants then the latter will be reduced to match the conversion price per share. |
· | Holder's right of alternative exercise price following issuance of certain options or convertible securities: if the Company issues or sells any options or convertible securities that are convertible into or exchangeable or exercisable for common shares at a price which varies or may vary with the market price of the common shares (Variable Price), the warrant holder shall have the right, but not the obligation, to substitute the Variable Price for the exercise price of the warrants. |
· | Adjustment upon market price decrease: if at any time prior to June 11, 2015, the Company effects a reverse stock split and 125% of the closing market price of the Company's common shares during any three consecutive trading days, after the effective date of the reverse stock split, is less than $2, then the exercise price of the warrants shall be reduced to 125% of the amount of the lowest closing market price of the common shares during such three trading day period. The exercise price of the warrants cannot be reduced by more than 20%. No adjustment will apply for subsequent reverse stock splits. |
· | Other events: if the Company takes any action that results in the dilution of the warrant holder not covered by the abovementioned round down protection measures (including, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company shall determine and implement an appropriate adjustment in the exercise price so as to protect the rights of the warrant holder. |
14. | Stock Incentive Plan: |
Grant Date
|
Number of Shares
|
Issued to
|
Vesting Period
|
|||
February 12, 2013
|
7,142
|
Chief Executive Officer
|
on the grant date
|
|||
September 26, 2013
|
7,142
|
Executive Vice President
|
on the grant date
|
|||
September 26, 2013
|
5,714
|
Chief Technical Officer
|
on the grant date
|
|||
December 18, 2013
|
7,142
|
Chief Executive Officer
|
on the grant date
|
Non-vested Shares
|
Weighted average
grant date fair value
|
|||||||
As of January 1, 2014 and December 31, 2014
|
21,034
|
$
|
366.24
|
15. | (Loss)/Earnings Per Common Share: |
· | any incremental shares assumed issued under the treasury stock method weighted for the period the non-vested shares were outstanding, with the exception of the 21,034 shares granted to the Company's Chief Executive Officer which will vest in the event of change of control and, consequently, those shares are excluded from the remaining non-vested shares, |
· | the potential dilution that could occur if warrants to issue common stock (see Note 13) were exercised, to the extent that they are dilutive, using the treasury stock method, and |
· | any shares granted and vested but not issued up to the reporting date. |
|
Year Ended December 31,
|
|||||||||||
|
2012
|
2013
|
2014
|
|||||||||
Income:
|
||||||||||||
Net (loss)/ income
|
(63,984
|
)
|
1,408
|
2,896
|
||||||||
|
||||||||||||
Earnings per share:
|
||||||||||||
Weighted average common shares outstanding, basic
|
2,427,084
|
2,437,361
|
12,958,111
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Warrants
|
-
|
-
|
2,785,339
|
|||||||||
Shares granted to the CEO
|
-
|
7,143
|
-
|
|||||||||
Weighted average common shares outstanding, diluted
|
2,427,084
|
2,444,504
|
15,743,449
|
|||||||||
Basic (loss)/earnings per share
|
(26.36
|
)
|
0.58
|
0.22
|
||||||||
Diluted (loss)/earnings per share
|
(26.36
|
)
|
0.58
|
0.18
|
16. | Voyage and Vessel Operating Expenses: |
Voyage Expenses
|
Year Ended December 31,
|
|||||||||||
|
2012
|
2013
|
2014
|
|||||||||
Port charges
|
24
|
18
|
15
|
|||||||||
Bunkers
|
177
|
125
|
-
|
|||||||||
Commissions
|
822
|
520
|
98
|
|||||||||
Total
|
1,023
|
663
|
113
|
Vessel Operating Expenses
|
Year Ended December 31,
|
|||||||||||
|
2012
|
2013
|
2014
|
|||||||||
Crew wages and related costs
|
361
|
-
|
744
|
|||||||||
Insurance
|
83
|
47
|
52
|
|||||||||
Repairs and maintenance
|
179
|
689
|
106
|
|||||||||
Spares and consumable stores
|
184
|
-
|
247
|
|||||||||
Taxes (Note 18)
|
7
|
9
|
(6
|
)
|
||||||||
Total
|
814
|
745
|
1,143
|
17. | Interest and Finance Costs: |
Interest and Finance Costs
|
Year Ended December 31,
|
|||||||||||
|
2012
|
2013
|
2014
|
|||||||||
Interest on debt (Note 11)
|
7,240
|
4,505
|
290
|
|||||||||
Delos termination fee interest (Note 21)
|
-
|
139
|
116
|
|||||||||
Bank charges
|
297
|
964
|
28
|
|||||||||
Amortization and write-off of financing fees
|
1,437
|
1,835
|
16
|
|||||||||
Amortization of debt discount
|
371
|
-
|
-
|
|||||||||
Total
|
9,345
|
7,443
|
450
|
18. | Income Taxes: |
19. | Financial Instruments: |
Counterparty
|
Notional Amount
December 31, 2013
|
Period
|
Effective Date
|
Interest Rate Payable
|
Fair Value – Liability
(Level 2)
December 31, 2103
|
|||||||||
ALPHA BANK
|
$
|
20,000
|
7 years
|
March 30, 2008
|
10.85
|
%
|
(1,697
|
)
|
Warrants Outstanding
December 31, 2014
|
Term
|
Warrant Exercise Price
|
Fair Value – Liability
December 31, 2014
|
||||||||
5,330,000
|
5 years
|
|
$2.50
|
(2,599)
|
|
As of December 31, 2013
|
|
Fair Value Measurement at Reporting Date
|
||||||||||||||
|
Total
|
Using Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
||||||||||||
Interest rate swap
|
1,697
|
-
|
1,697
|
-
|
As of December 31, 2014
|
Fair Value Measurement at Reporting Date
|
|||||||||||||||
|
Total
|
Using Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
||||||||||||
Warrants
|
2,599
|
-
|
-
|
2,599
|
Beginning balance – January 1, 2014
|
-
|
|||
Issuance of warrants
|
6,477
|
|||
Change in fair value of warrants, included in Statement of Comprehensive (Loss)/Income
|
(3,878
|
)
|
||
Closing balance – December 31, 2014
|
2,599
|
Balance Sheet Location
|
Fair Value
|
||||||
Interest rate swaps
|
Current liabilities – Derivative financial instruments
|
1,135
|
|||||
Interest rate swaps
|
Non-Current liabilities –Derivative financial instruments
|
562
|
Balance Sheet Location
|
Fair Value
|
||||||
Warrants
|
Non-Current liabilities –Derivative financial instruments
|
2,599
|
Amount of (Loss)/ Gain Recognized in Statement of Comprehensive (Loss)/Income
Located in (Loss)/Gain on Derivate Financial Instruments
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Interest rate swaps- change in fair value
|
2,656
|
2,313
|
651
|
|||||||||
Interest rate swaps– realized loss
|
(3,103
|
)
|
(2,484
|
)
|
(664
|
)
|
||||||
Warrants- change in fair value
|
-
|
-
|
3,879
|
|||||||||
Total
|
(447
|
)
|
(171
|
)
|
3,866
|
20. | Gain on disposal of subsidiaries: |
21. | Other Non Current Liabilities |
Year ending December 31,
|
Tranche A of the Termination Fee
|
Tranche B of the Termination Fee
|
||||||
2015
|
1,120
|
-
|
||||||
2016
|
800
|
-
|
||||||
2017
|
1,500
|
806
|
||||||
Total
|
3,420
|
806
|
22. | Other Operating Income: |
23. | Subsequent Events |
|
December 31,
|
|||||||||||
2012
|
2013
|
2014
|
||||||||||
EXPENSES
|
|
|||||||||||
General and administrative expenses
|
5,635
|
2,865
|
2,369
|
|||||||||
Foreign currency gains, net
|
59
|
23
|
(32
|
)
|
||||||||
Gain on sale of vessels
|
-
|
(1,591
|
)
|
-
|
||||||||
Operating loss
|
(5,694
|
)
|
(1,297
|
)
|
(2,337
|
)
|
||||||
OTHER (EXPENSES) / INCOME
|
||||||||||||
Interest and finance costs
|
(2,059
|
)
|
(1,919
|
)
|
(17
|
)
|
||||||
Gain / (loss) on derivative financial instruments
|
24
|
(2
|
)
|
3,877
|
||||||||
Interest income
|
0
|
56
|
63
|
|||||||||
Other, net
|
688
|
(2
|
)
|
-
|
||||||||
Total Other (expenses)/income, net
|
(1,347
|
)
|
(1,867
|
)
|
3,923
|
|||||||
Equity in earnings / (loss) of subsidiaries
|
(56,943
|
)
|
4,571
|
1,310
|
||||||||
Net Income / (loss)
|
(63,984
|
)
|
1,407
|
2,896
|
||||||||
|
||||||||||||
(Loss)/earnings per common share, basic
|
(26.36
|
)
|
0.58
|
0.22
|
||||||||
(Loss)/earnings per common share, diluted
|
(26.36
|
)
|
0.58
|
0.18
|
|
December 31,
|
|||||||||||
2012
|
2013
|
2014
|
||||||||||
Net cash (used in) / provided by Operating Activities
|
(844
|
)
|
32,633
|
(1,845
|
)
|
|||||||
|
||||||||||||
Cash flows from Investing Activities
|
||||||||||||
Investment in subsidiaries
|
-
|
(14,400
|
)
|
(27,138
|
)
|
|||||||
Decrease/(increase) in restricted cash
|
788
|
164
|
(79
|
)
|
||||||||
Net proceeds from sale of fixed assets |
56
|
50
|
-
|
|||||||||
Net cash provided by / (used in) Investing Activities
|
844
|
(14,186
|
)
|
(27,217
|
)
|
|||||||
Cash flows from Financing Activities
|
||||||||||||
Proceeds from debt
|
500
|
-
|
-
|
|||||||||
Principal payments of debt
|
(500
|
)
|
(6,029
|
)
|
-
|
|||||||
Issuance of common stock
|
-
|
-
|
20,191
|
|||||||||
Follow-on offering issuance costs
|
-
|
-
|
(710
|
)
|
||||||||
Payment of financing costs
|
-
|
(2,837
|
)
|
-
|
||||||||
Net cash (used in)/provided by Financing Activities
|
-
|
(8,866
|
)
|
19,481
|
||||||||
Net increase / (decrease) in cash and cash equivalents
|
-
|
9,581
|
(9,581
|
)
|
||||||||
Cash and cash equivalents at beginning of year
|
-
|
-
|
9,581
|
|||||||||
Cash and cash equivalents at end of year
|
-
|
9,581
|
-
|
2012
|
2013
|
2014
|
||||||||||
Return on Investment
|
475
|
168
|
809
|
|||||||||
Return of Investment
|
-
|
62,766
|
-
|
|||||||||
Total cash from subsidiaries
|
475
|
62,934
|
809
|
Clause
|
Page
|
|
1
|
Interpretation
|
1
|
2
|
Facility
|
15
|
3
|
Position of the Lenders, the Swap Bank and the Majority Lenders
|
16
|
4
|
Drawdown
|
17
|
5
|
Interest
|
18
|
6
|
Interest Periods
|
20
|
7
|
Default Interest
|
21
|
8
|
Repayment and Prepayment
|
22
|
9
|
Conditions Precedent
|
24
|
10
|
Representations and Warranties
|
25
|
11
|
General Undertakings
|
28
|
12
|
Corporate Undertakings
|
33
|
13
|
Insurance
|
34
|
14
|
Ship Covenants
|
39
|
15
|
Security Cover
|
43
|
16
|
Payments and Calculations
|
45
|
17
|
Application of Receipts
|
47
|
18
|
Application of Earnings;Swap Payments
|
48
|
19
|
Events of Default
|
48
|
20
|
Fees and Expenses
|
53
|
21
|
Indemnities
|
55
|
22
|
No Set-Off or Tax Deduction
|
57
|
23
|
Illegality, etc
|
57
|
24
|
Increased Costs
|
60
|
25
|
Set-Off
|
62
|
26
|
Transfers and Changes in Lending Offices
|
63
|
27
|
Variations and Waivers
|
66
|
28
|
Notices
|
67
|
29
|
Supplemental
|
69
|
30
|
Law and Jurisdiction
|
70
|
Schedule 1 Lenders and Commitments
|
72
|
Schedule 2 Drawdown Notice
|
73
|
Schedule 3 Condition Precedent Documents
|
74
|
Schedule 4 Transfer Certificate
|
77
|
Schedule 5 Mandatory Cost Formula
|
81
|
Schedule 6 Designation Notice
|
83
|
Schedule 7 Form of Compliance Certificate
|
84
|
Execution Pages
|
85
|
(1) | MONTE CARLO 71 SHIPPING COMPANY LIMITED, a corporation incorporated in in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (the "Borrower" ); |
(2) | THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders ; |
(3) | ALPHA BANK A.E ., acting through its office at 93 Akti Miaouli, 185 38, Piraeus, Greece, as Agent ; |
(4) | ALPHA BANK A.E., acting through its office at 93 Akti Miaouli, 185 38, Piraeus, Greece, as Security Trustee ; and |
(5) | ALPHA BANK A.E ., acting through its office at 93 Akti Miaouli, 185 38, Piraeus, Greece, as Swap Bank . |
(A) | The Lenders have agreed to make available to the Borrower, in one advance, a post- delivery term loan facility of up $20,125,000 for the purpose of financing part of the acquisition cost of the Ship (as defined below). |
(B) | The Swap Bank may agree to enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower's exposure under this Agreement to interest rate fluctuations. |
(C) | The Lenders and the Swap Bank have agreed to share pari passu in the security to be granted to the Security Trustee pursuant to this Agreement. |
1 | INTERPRETATION |
1.1 | Definitions |
(a) | 30 June 2014 (or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower); or |
(b) | if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated; |
(a) | it is entered into by the Borrower pursuant to the Master Agreement with the Swap Bank which, at the time the Transaction is entered into, is also the Lender; |
(b) | its purpose is the hedging all of or part of the Borrower's exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the final Repayment Date; and |
(a) | except to the extent that they fall within paragraph (b); |
(i) | all freight, hire and passage moneys; |
(ii) | compensation payable to the Borrower or the Security Trustee in the event of requisition of the Ship for hire; |
(iii) | remuneration for salvage and towage services; |
(iv) | demurrage and detention moneys; |
(v) | damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; and |
(vi) | all moneys which are at any time payable under any Insurances in respect of loss of hire; and |
(b) | if and whenever the Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Ship; |
(a) | Mr. Evangelos J. Pistiolis; |
(b) | all the lineal descendants in direct line of Mr. Evangelos J. Pistiolis; |
(c) | a husband or wife, or former husband or wife, or widower or widow of any of the above persons; |
(d) | the estates, trusts or legal representatives of which any of the above persons are the beneficiaries; and |
(e) | each company (other than a member of the Group) legally or beneficially owned or (as the case may be) controlled by one or more of the persons or entities which would fall within paragraphs (a) to (d) of this definition, |
(f) | any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or |
(g) | any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident, |
(a) | any release of Environmentally Sensitive Material from the Ship; or |
(b) | any incident in which Environmentally Sensitive Material is released from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Ship and/or the Borrower and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or |
(c) | any other incident in which Environmentally Sensitive Material is released otherwise than from the Ship and in connection with which the Ship is actually or potentially liable to be arrested and/or where the Borrower and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; |
(a) | this Agreement; |
(b) | the Agency and Trust Deed; |
(c) | the Master Agreement; |
(d) | the Master Agreement Assignment; |
(e) | the Earnings Account Pledge; |
(f)
|
the Corporate Guarantee; |
(g) | the Shares Pledge; |
(h) | the Mortgage; |
(i) | the General Assignment; |
(j) | the Approved Charter Assignment; |
(k) | the Approved Manager's Undertaking; |
(l) | any Charterparty Assignment; and |
(m) | any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, the Corporate Guarantor and the Approved Manager or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Bank under this Agreement or any of the other documents referred to in this definition and, in the singular, means any of them; |
(a) | for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor; |
(b) | under any loan stock, bond, note or other security issued by the debtor; |
(c) | under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor; |
(d) | under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor; |
(e) | under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or |
(f) | under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person; |
(a) | all policies and contracts of insurance or, as the case may be, reinsurance (if applicable), policies or contracts, including entries of the Ship in any protection and indemnity or war risks association, effected in respect of the Ship, the Earnings or otherwise in relation to the Ship whether before, on or after the date of this Agreement; and |
(b) | all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement; |
(a) | the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate; or |
(b) | if no rate is quoted on the Screen Rate, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one-sixteenth of one per cent.) of the rates per annum notified to the Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank's request at or about 11.00 a.m. (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it; |
(a) | before the Loan is made, Lenders the aggregate of whose Commitments total 66.66 per cent. of the Total Commitments; and |
(b) | after the Loan is made, Lenders the aggregate of whose Contributions total 66.66 per cent. of the Loan; |
(a) | Security Interests created by the Finance Documents; |
(b) | liens for unpaid master's and crew's wages in accordance with usual maritime practice; |
(c) | liens for salvage; |
(d) | liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to the Ship not prohibited by this Agreement; |
(e) | liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(g); |
(f) | any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while the Borrower is actively prosecuting or defending such proceedings or arbitration in good faith by appropriate steps; and |
(g) | Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;] |
(a) | any Finance Document; |
(b) | any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document; |
(c) | any other document contemplated by or referred to in any Finance Document; and |
(d) | any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c); |
(a) | England and Wales; |
(b) | the country under the laws of which the company is incorporated or formed; |
(c) | a country in which the company has the centre of its main interests or in which the company's central management and control is or has recently been exercised; |
(d) | a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax; |
(e) | a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and |
(f) | a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c); |
(a) | any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or |
(b) | any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a); |
(a) | imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council; |
(b) | imposed by CISADA; or |
(c) | otherwise imposed by any law or regulation by which the Borrower is bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of the Borrower and for which a waiver or suspension has not been obtained; |
(a) | a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind; |
(b) | the rights of a plaintiff under an action in rem in which the vessel has been arrested or a writ has been issued or similar step taken; and |
(c) | any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution; |
(a) | all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid; |
(b) | no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; |
(c) | neither the Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and |
(d) | the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document; |
(a) | actual, constructive, compromised, agreed or arranged total loss of the Ship; |
(b) | any expropriation, confiscation, requisition or acquisition of the Ship, whether for full or part consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 30 days from the date of such occurrence redelivered to the Borrower's full control; |
(c) | any condemnation of the Ship by any tribunal or by any person or persons claiming to be a tribunal; and |
(d) | any arrest, capture, seizure, confiscation or detention of the Ship (including any hijacking, piracy or theft) unless it is within 1 month from the date of such occurrence redelivered to the Borrower's full control; |
(a) | in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of; |
(b) | in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earliest of: |
(i) | the date on which a notice of abandonment is given to the insurers; and |
(ii) | the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship's insurers in which the insurers agree to treat the Ship as a total loss; and |
(c) | in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred; |
(a) | Borrower, if it is resident for tax purposes in the United States of America, or |
(b) | Borrower or any Security Party some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes. |
1.2 | Construction of certain terms |
1.3 | Meaning of "month" |
(a) | on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or |
(b) | on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day, |
1.4 | Meaning of "subsidiary" |
(a) | a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or |
(b) | P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or |
(c) | P has the direct or indirect power to appoint or remove a majority of the directors of S; or |
(d) | P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P; |
1.5 |
General Interpretation
In this Agreement:
|
(a) | references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise; |
(b) | references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise; |
(c) | words denoting the singular number shall include the plural and vice versa; and |
(d) | Clauses 1.1 to 1.5 apply unless the contrary intention appears. |
1.6 | Headings |
2 | FACILITY |
2.1 | Amount of facility |
2.2 | Lenders' participations in Loan |
2.3 | Purpose of Loan |
3 | POSITION OF THE LENDERS, THE SWAP BANK AND THE MAJORITY LENDERS |
3.1 | Interests of Lenders and Swap Bank several |
(a) | each Lender shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement; and |
(b) | the Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under the Master Agreement, |
3.2 | Proceedings by individual Lender or Swap Bank |
(a) | any other liability or obligation of either Borrower or a Security Party under or connected with a Finance Document; or |
(b) | any misrepresentation or breach of warranty by either Borrower or a Security Party in or connected with a Finance Document. |
3.3 | Obligations several |
(a) | the obligations of the other Lenders or (as the case may be) the Swap Bank being increased; nor |
(b) | either Borrower, any Security Party or any other Creditor Party being discharged (in whole or in part) from its obligations under any Finance Document or under the Master Agreement, |
3.4 | Parties bound by certain actions of Majority Lenders |
(a) | any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document; |
(b) | any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document (subject always to Clause 27.2); |
(c) | any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation. |
3.5 | Reliance on action of Agent |
(a) | shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and |
(b) | shall not be entitled to require any evidence that such an instruction or authorisation has been given. |
3.6 | Construction |
4 | DRAWDOWN |
4.1 | Request for Loan |
4.2 | Availability |
(a) | the Drawdown Date has to be a Business Day during the Availability Period; |
(b) | the Loan shall be made available in one advance and shall not exceed the amount of $20,125,000; |
(c) | if the amount of the Loan actually drawn down by the Borrower pursuant to this Agreement is less than $20,125,000 the undrawn portion of the Loan (and an equal amount of the Total Commitments), shall be automatically cancelled as at the Drawdown Date; and |
(d) | the aggregate amount of the Loan shall not exceed the Total Commitments; |
4.3 | Notification to Lenders of receipt of the Drawdown Notice |
(a) | the amount of the Loan and the Drawdown Date; |
(b) | the amount of that Lender's participation in the Loan; and |
(c) | the duration of the first Interest Period. |
4.4 | Drawdown Notice irrevocable |
4.5 | Lenders to make available Contributions |
4.6 | Disbursement of the Loan |
(a) | to the account which the Borrower specifies in the Drawdown Notice and the Borrower hereby unconditionally and irrevocably authorises the Agent to make such payment on its behalf; and |
(b) | in the like funds as the Agent received the payments from the Lenders. |
4.7 | Disbursement of the Loan to third party |
5 | INTEREST |
5.1 | Payment of normal interest |
5.2 | Normal rate of interest |
5.3 | Payment of accrued interest |
5.4 | Notification of Interest Periods and rates of normal interest |
(a) | each rate of interest; and |
(b) | the duration of each Interest Period, |
5.5 | Obligation of Reference Bank to quote |
5.6 | Absence of quotations by Reference Bank |
5.7 | Market disruption |
(a) | no screen rate is quoted in the Screen Rate available for an Interest Period and the Reference Bank does not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or |
(b) | at least 1 Business Day before the start of an Interest Period, a Lender may notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to that Lender of funding its respective Contribution (or any part of it) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or |
(c) | at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period. |
5.8 | Notification of market disruption |
5.9 | Suspension of drawdown |
(a) | in a case falling within Clauses 5.7(a) or (b), the Lenders' obligations to make available the Loan; |
(b) | in a case falling within Clause 5.7(c), the Affected Lender's obligation to participate in the Loan, |
5.10 | Negotiation of alternative rate of interest |
5.11 | Application of agreed alternative rate of interest |
5.12 | Alternative rate of interest in absence of agreement |
5.13 | Notice of prepayment |
5.14 | Prepayment; termination of Commitments |
(a) | on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled; and |
(b) | on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any). |
5.15 | Application of prepayment |
6 | INTEREST PERIODS |
6.1 | Commencement of Interest Periods |
6.2 | Duration of normal Interest Periods |
(a) | 1, 3 or 6 months as notified by the Borrower to the Agent not later than 11.00 a.m. (Athens time) 3 Business Days before the commencement of the Interest Period; or |
(b) | 3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or |
(c) | such other period as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower. |
6.3 | Duration of Interest Periods for Repayment Instalments |
6.4 | Non-availability of matching deposits for Interest Period selected |
7 | DEFAULT INTEREST |
7.1 | Payment of default interest on overdue amounts |
(a) | the date on which the Finance Documents provide that such amount is due for payment; or |
(b) | if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or |
(c) | if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable. |
7.2 | Default rate of interest |
(a) | in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or |
(b) | in the case of any other overdue amount, the rate set out at Clause 7.3(b). |
7.3 | Calculation of default rate of interest |
(a) | the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it); |
(b) | the aggregate of the Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time: |
(i) | LIBOR; or |
(ii) | if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine. |
7.4 | Notification of interest periods and default rates |
7.5 | Payment of accrued default interest |
7.6 | Compounding of default interest |
7.7 | Application to Master Agreement |
8 | REPAYMENT AND PREPAYMENT |
8.1 | Amount of Repayment Instalments |
(a) | 20 consecutive semi-annual instalments in an amount of $706,000 each (the "Repayment Instalments" and each a "Repayment Instalment"); and |
(b) | a balloon instalment of $6,005,000 (the "Balloon Instalment"). |
8.2 | Repayment Dates |
8.3 | Final Repayment Date |
8.4 | Voluntary prepayment |
8.5 | Conditions for voluntary prepayment |
(a) | a partial prepayment shall be $400,000 or a higher integral multiple thereof (or any other amount acceptable to Agent in its sole discretion); |
(b) | the Agent has received from the Borrower at least 10 days' prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; |
(c) | the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with; and |
(d) | the Borrower has complied with Clause 8.12 on or prior to the date of prepayment. |
8.6 | Effect of notice of prepayment |
8.7 | Notification of notice of prepayment |
8.8 | Mandatory prepayment |
(a) | if the Ship is sold, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or |
(b) | if the Ship becomes a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss. |
8.9 | Amounts payable on prepayment |
8.10 | Application of partial prepayment |
8.11 | No reborrowing |
8.12 | Unwinding of Designated Transactions under the Master Agreement |
(a) | wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1; or |
(b) | provide the Agent with additional security in all respects acceptable to the Agent to secure the amount determined by the Agent to be equal to the difference between the notional principal amount of the continuing Designated Transactions and the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1. |
8.13 | Prepayment of Swap Benefit |
9 | CONDITIONS PRECEDENT |
9.1 | Documents, fees and no default |
(a) | that, on or before the date of this Agreement, the Agent receives: |
(i) | the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; |
(ii) | payment of the arrangement fee payable pursuant to Clause 20.1; |
(iii) | payment in full of any expenses payable pursuant to Clause 20.2 which are due and payable on the date of this Agreement; |
(b) | that, on or before the Drawdown Date, the Agent receives: |
(i) | the documents described in Part B of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; and |
(ii) | payment of any expenses payable pursuant to Clause 20.2 which are due and payable on the Drawdown Date; |
(c) | that both at the date of the Drawdown Notice and at the Drawdown Date: |
(i) | no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Loan; |
(ii) | the representations and warranties in Clause 10 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; and |
(iii) | none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and |
(iv) | there has been no material adverse change in the financial condition, state of affairs or prospects of the Borrower, the Corporate Guarantor or any other Security Party in the light of which the Agent considers that there is a significant risk that the Borrower, the Corporate Guarantor or any other Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents to which it is a party as they fall due; |
(d) | that, if the ratio set out in Clause 15.1 were applied immediately following the borrowing of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; |
(e) | evidence that the Borrower is in compliance with the minimum liquidity requirements pursuant to and compliance with Clause 11.20; and |
(f) | that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrower prior to the Drawdown Date. |
9.2 | Waiver of conditions precedent |
10 | REPRESENTATIONS AND WARRANTIES |
10.1 | General |
10.2 | Status |
10.3 | Share capital and ownership |
10.4 | Corporate power |
(a) | to execute the Approved Charter, to purchase and pay for the Ship pursuant to the Bill of Sale and register the Ship in its name under the Approved Flag; |
(b) | to execute the Finance Documents; and |
(c) | to borrow under this Agreement, to enter into the Designated Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which it is a party. |
10.5 | Consents in force |
10.6 | Legal validity; effective Security Interests |
(a) | constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and |
(b) | create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate, |
10.7 | No third party Security Interests |
(a) | the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and |
(b) | no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates. |
10.8 | No conflicts |
(a) | any law or regulation of any Pertinent Jurisdiction or, to its knowledge, of any other jurisdiction; or |
(b) | the constitutional documents of the Borrower; or |
(c) | any contractual or other obligation or restriction which is binding on the Borrower or any of its assets. |
10.9 | No withholding taxes |
10.10 | No default |
10.11 | Information |
10.12 | No litigation |
10.13 | Compliance with certain undertakings |
10.14 | Taxes paid |
10.15 | ISM Code and ISPS Code compliance |
10.16 | No money laundering |
10.17 | No immunity |
10.18 | Repetition |
(a) | on the date of service of the Drawdown Notice; |
(b) | on the Drawdown Date; and |
(c) | with the exception of Clauses 10.9, 10.10, 10.11 and 10.12, on the first day of each Interest Period and on the date of any Compliance Certificate issued pursuant to Clause 11.20, |
10.19 | Validity and completeness of the Approved Charter |
(a) | the copy of the Approved Charter delivered to the Agent before the date of this Agreement is a true and complete copy; and |
(b) | no amendments or additions to the Approved Charter have been agreed nor has the Borrower or the Approved Charterer waived any of their respective rights thereunder. |
10.20 | No rebates etc. |
10.21 | Sanctions |
(a) | The Borrower is not a Prohibited Person or is it owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person and nor does it own or control a Prohibited Person; and |
(b) | no proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanction. |
10.22 | FATCA |
11 | GENERAL UNDERTAKINGS |
11.1 | General |
11.2 | Title; negative pledge |
(a) | hold the legal title to, and own the entire beneficial interest in the Ship, the Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests; |
(b) | not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future (including, but not limited to, the Borrower's rights against the Swap Bank under the Master Agreement or all or any part of the Borrower's interest in any amount payable to it by the Swap Bank under the Master Agreement); and |
(c) | procure that its liabilities under the Finance Documents to which it is party do and will rank at least pari passu with all other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law. |
11.3 | No disposal of assets |
(a) | all or a substantial part of its assets (including, without limitation, the Ship), whether by one transaction or a number of transactions, whether related or not; or |
(b) | any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.; |
11.4 | No other liabilities or obligations to be incurred |
(a) | liabilities and obligations under the Finance Documents to which it is a party and/or the Approved Charter; |
(b) | liabilities or obligations reasonably incurred in the ordinary course of operating and chartering the Ship; and |
(c) | in respect of Designated Transactions under the Master Agreement. |
11.5 | Information provided to be accurate |
11.6 | Provision of financial statements |
(a) | as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower (commencing with the year ending on 31 December 2014), the annual audited individual accounts of the Borrower for that financial year; |
(b) | as soon as possible, but in no event later than 180 days after the end of each financial year of the Corporate Guarantor (commencing with the financial year ending on 31 December 2013) the annual audited consolidated accounts of the Group for that Financial Year; |
(c) | promptly after each request by the Agent, such further financial or other information in respect of the Borrower, the Ship, the Corporate Guarantor, the other Security Parties and any other member of the Group (including, without limitation, any information regarding any sale and purchase agreements, investment brochures, charter agreements and shipbuilding contracts) which may be requested by the Agent from time to time. |
11.7 | Form of financial statements |
(a) | be prepared in accordance with all applicable laws and GAAP consistently applied and, in the case of any audited financial accounts, be prepared by an approved auditor; |
(b) | give a true and fair view of the state of affairs of the Borrower, the Corporate Guarantor or, as the case may be, the Group at the date of those financial statements and of its profit for the period to which those accounts relate; and |
(c) | fully disclose or provide for all significant liabilities of the Borrower, the Corporate Guarantor or, as the case may be, the Group. |
11.8 | Shareholder and creditor notices and press releases |
11.9 | Consents |
(a) | for the Borrower to perform its obligations under any Finance Document to which it is or, as the case may be, will be a party and/or the Approved Charter; |
(b) | for the validity or enforceability of any Finance Document to which it is or, as the case may be, will be a party and/or the Approved Charter; and |
(c) | for the Borrower to continue to own and operate the Ship, |
11.10 | Maintenance of Security Interests |
(a) | at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and |
(b) | without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates. |
11.11 | Notification of litigation |
11.12 | Approved Charter |
11.13 | Principal place of business |
11.14 | Confirmation of no default |
(a) | no Event of Default or Potential Event of Default has occurred; or |
(b) | no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given. |
11.15 | Notification of default |
(a) | the occurrence of an Event of Default; or |
(b) | any matter which indicates that an Event of Default may have occurred; |
11.16 | Ownership |
11.17 | Provision of further information |
(a) | to the Borrower, the Ship, the Earnings or the Insurances (including but not limited to any sales or purchases of any vessels owned by any member of the Group, the incurrence of Financial Indebtedness by any members of the Group, the refinancing or restructuring of any loan or credit facilities to which any members of the Group are a party and details of the employment of the vessels owned a member of the Group); or |
(b) | to any other matter relevant to, or to any provision of, a Finance Document or the Master Agreement, |
11.18 | Provision of copies and translation of documents |
11.19 | "Know your customer" checks |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(b) | any change in the status of the Borrower or any Security Party after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
11.20 | Minimum Liquidity |
11.21 | Compliance Check |
11.22 | Sanctions |
(a) | The Borrower undertakes to ensure, or as the case may be, to procure that it: |
(i) | is not a Prohibited Person; |
(ii) | is not owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person; and |
(iii) | does not own or control a Prohibited Person; and |
(b) | no proceeds of the Loan or any part of it shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions. |
11.23 | Application of FATCA |
12 | CORPORATE UNDERTAKINGS |
12.1 | General |
12.2 | Maintenance of status |
12.3 |
Negative undertakings
The Borrower will not: |
(a) | change the nature of its business; or |
(b) | pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital; or |
(c) | provide any form of credit or financial assistance to: |
(i) | a person who is directly or indirectly interested in the Borrower's share or loan capital; or |
(ii) | any company in or with which such a person is directly or indirectly interested or connected, |
(d) | open or maintain any account with any bank or financial institution except accounts with the Agent and the Security Trustee for the purposes of the Finance Documents; |
(e) | issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital; |
(f) | acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative other than the Designated Transactions under the Master Agreement; or |
(g) | enter into any form of amalgamation, merger or de-merger, acquisition, divesture, split-up or any form of reconstruction or reorganisation. |
13 | INSURANCE |
13.1 | General |
13.2 | Maintenance of obligatory insurances |
(a) | fire and usual marine risks (including hull and machinery and excess risks); |
(b) | war risks; |
(c) | protection and indemnity risks; and |
(d) | any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for the Borrower to insure and which are specified by the Security Trustee by notice to the Borrower. |
13.3 | Terms of obligatory insurances |
(a) | in Dollars; |
(b) | in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) 120 per cent. of the Loan and the Swap Exposure and (ii) the Market Value of the Ship (determined in accordance with Clause 15.3); and |
(c) | in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market; |
(d) | in relation to protection and indemnity risks in respect of the Ship's full tonnage; |
(e) | on approved terms; and |
(f) | through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations. |
13.4 | Further protections for the Creditor Parties |
(a) | subject always to paragraph (b), name the Borrower as the sole named assured unless the interest of every other named assured is limited: |
(i) | in respect of any obligatory insurances for hull and machinery and war risks; |
(A) | to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and |
(B) | to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and |
(ii) | in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it; |
(b) | whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance; |
(c) | name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify; |
(d) | provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever; |
(e) | provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and |
13.5 | Renewal of obligatory insurances |
(a) | at least 21 days before the expiry of any obligatory insurance: |
(i) | notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and |
(ii) | obtain the Security Trustee's approval to the matters referred to in paragraph (i); |
(b) | at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); and |
(c) | procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal. |
13.6 | Copies of policies; letters of undertaking |
(a) | they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4; |
(b) | they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause; |
(c) | they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances; |
(d) | they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and |
(e) | they will not set off against any sum recoverable in respect of a claim relating to the Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Security Trustee. |
13.7 | Copies of certificates of entry |
(a) | a certified copy of the certificate of entry for the Ship; |
(b) | a letter or letters of undertaking in such form as may be required by the Security Trustee; and |
(c) | a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship. |
13.8 | Deposit of original policies |
13.9 | Payment of premiums |
13.10 | Guarantees |
13.11 | Restrictions on employment |
13.12 | Compliance with terms of insurances |
(a) | the Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval; |
(b) | the Borrower shall not make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances; |
(c) | the Borrower shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation) and, if applicable, shall procure that the Approved Manager complies with this requirement; and |
(d) | the Borrower shall not employ the Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify. |
13.13 | Alteration to terms of insurances |
13.14 | Settlement of claims |
13.15 | Provision of copies of communications |
(a) | the approved brokers; and |
(b) | the approved protection and indemnity and/or war risks associations; and |
(c) | the approved insurance companies and/or underwriters, which relate directly or indirectly to: |
(i) | the Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and |
(ii) | any credit arrangements made between the Borrower and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances. |
13.16 | Provision of information and further undertakings |
(a) | obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or |
(b) | effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 or dealing with or considering any matters relating to any such insurances, |
(i) | do all things necessary and provide the Agent and the Security Trustee with all documents and information to enable the Security Trustee to collect or recover any moneys in respect of the Insurances which are payable to the Security Trustee pursuant to the Finance Documents; and |
(ii) | promptly provide the Agent with full information regarding any Major Casualty in consequence whereof the Ship has become or may become a Total Loss and agree to any settlement of such casualty or other accident or damage to the Ship only with the Agent's prior written consent, |
13.17 | Mortgagee's interest, marine insurance and additional perils insurance |
13.18 | Review of insurance requirements |
13.19 | Modification of insurance requirements |
13.20 | Compliance with mortgagee's instructions |
14 | SHIP COVENANTS |
14.1 | General |
14.2 | Ship's name and registration |
14.3 | Repair and classification |
(a) | consistent with first-class ship ownership and management practice; |
(b) | so as to maintain the highest class for vessels of the same type, age and specifications as the Ship with a first class classification society acceptable to the Agent, which is a member of IACS and acceptable to the Agent, free of outstanding or overdue recommendations and conditions of such classification society affecting the Ship's class; and |
(c) | so as to comply with all laws and regulations applicable to vessels registered at ports in the relevant Approved Flag State or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the ISM Code or the ISPS Code. |
14.4 | Classification society undertaking |
(a) | to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records and any other related records held by the classification society in relation to the Ship; |
(b) | to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of the Borrower and the Ship at the offices of the classification society and to take copies of them; |
(c) | to notify the Security Trustee immediately in writing if the classification society: |
(i) | receives notification from the Borrower or any person that the Ship's classification society is to be changed; or |
(ii) | becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship's class under the rules or terms and conditions of the Borrower's or the Ship's membership of the classification society; and |
(d) | following receipt of a written request from the Security Trustee: |
(i) | to confirm that the Borrower is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or |
(ii) | if the Borrower is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the classification society. |
14.5 | Modification |
14.6 | Removal of parts |
14.7 | Surveys |
14.8 | Inspection |
14.9 | Prevention of and release from arrest |
(a) | all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship, the Earnings or the Insurances; |
(b) | all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and |
(c) | all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances, |
14.10 | Compliance with laws etc. |
(a) | comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship, its ownership, operation and management or to the business of the Borrower and the Approved Managers (including, but not limited to, the International Management Code for the Safe Operation of Ships and for Pollution Prevention); |
(b) | not employ the Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and |
(c) | in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship's war risks insurers unless the prior written consent of the Security Trustee has been given and the Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require. |
14.11 | Provision of information |
(a) | the Ship, its employment, position and engagements; |
(b) | the Earnings and payments and amounts due to the Ship's master and crew; |
(c) | any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship; |
(d) | any towages and salvages; and |
(e) | the Borrower's, the Approved Managers' or the Ship's compliance with the ISM Code and the ISPS Code, |
14.12 | Notification of certain events |
(a) | any casualty which is or is likely to be or to become a Major Casualty; |
(b) | any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss; |
(c) | any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with; |
(d) | any arrest or detention of the Ship, any exercise or purported exercise of any lien on the Ship or its Earnings or any requisition of the Ship for hire; |
(e) | any intended dry docking of the Ship; |
(f) | any Environmental Claim made against the Borrower or in connection with the Ship, or any Environmental Incident; |
(g) | any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, an Approved Manager or otherwise in connection with the Ship; or |
(h) | any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or ISPS Code not being complied with, |
14.13 |
Restrictions on chartering, appointment of managers etc.
The Borrower shall not:
|
(a) | let the Ship on demise charter for any period; |
(b) | other than the Approved Charter, enter into any time or consecutive voyage charter, in respect of the Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months; |
(c) | enter into any charter in relation to the Ship under which more than 2 months' hire (or the equivalent) is payable in advance; |
(d) | charter the Ship otherwise than on bona fide arm's length terms at the time when the Ship is fixed; |
(e) | appoint a manager of the Ship other than the Approved Managers or agree to any alteration to the terms of each Approved Manager's appointment; |
(f) | de-activate or lay up the Ship; or |
(g) | put the Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $600,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or its Earnings for the cost of such work or for any other reason. |
14.14 | Notice of Mortgage |
14.15 | Sharing of Earnings |
(a) | enter into any agreement or arrangement for the sharing of any Earnings; |
(b) | enter into any agreement or arrangement for the postponement of any date on which the Earnings are due; and |
(c) | the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of the Borrower to the Earnings. |
14.16 | ISPS Code |
(a) | procure that the Ship and the company responsible for the Ship's compliance with the ISPS Code comply with the ISPS Code; and |
(b) | maintain for the Ship an ISSC; and |
(c) | notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC. |
14.17 | Charterparty Assignment |
(a) | If the Borrower enters into any Charter, it shall at the request of the Agent, execute in favour of the Security Trustee a Charterparty Assignment (such Charterparty Assignment to be notified to, acknowledged by, the relevant charterer and any charter guarantor); and |
(b) | without limiting the generality of the above, if that Charter is a bareboat charter, procure that the bareboat charterer shall execute in favour of the Security Trustee an assignment of (inter alia) all its rights, title and interest in and to the Insurances in respect of the Ship effected either by the Borrower or by the bareboat charterer and a customary letter of undertaking in favour of the Security Trustee whereby (inter alia) the interests of the bareboat charterer under the bareboat charter are subordinated to the interests of the Security Trustee under the Finance Documents, each in the Agreed Form, |
15 | SECURITY COVER |
15.1 | Minimum required security cover |
(a) | the Market Value of the Ship; plus |
(b) |
the net realisable value of any additional security previously provided under this Clause 15,
is below 125 per cent. of the Loan and the Swap Exposure.
|
15.2 | Provision of additional security; prepayment |
15.3 | Valuation of Ship |
(a) | as at a date not more than 30 days previously; |
(b) | by an Approved Broker nominated and appointed by the Agent for this purpose; |
(c) | with or without physical inspection of the Ship (as the Agent may require); |
(d) | on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and |
(e) | after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale. |
15.4 | Value of additional vessel security |
15.5 | Valuations binding |
15.6 | Provision of information |
15.7 | Frequency of valuations |
15.8 | Payment of valuation expenses |
15.9 | Application of prepayment |
16 | PAYMENTS AND CALCULATIONS |
16.1 | Currency and method of payments |
(a) | by not later than 11.00 a.m. (New York City time) on the due date; |
(b) | in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); |
(c) | in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to the account of the Agent - with reference "Monte Carlo 71 Shipping Company Limited" (SWIFT address: CRBAGRAA), or to such other account/branch with such other bank as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and |
(d) | in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties. |
16.2 | Payment on non-Business Day |
(a) | the due date shall be extended to the next succeeding Business Day; or |
(b) | if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day; |
16.3 | Basis for calculation of periodic payments |
16.4 | Distribution of payments to Creditor Parties |
(a) | any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and |
(b) | amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Bank generally shall be distributed by the Agent to each Lender and the Swap Bank pro rata to the amount in that category which is due to it. |
16.5 | Permitted deductions by Agent |
16.6 | Agent only obliged to pay when monies received |
16.7 | Refund to Agent of monies not received |
(a) | refund the sum in full to the Agent; and |
(b) | pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it. |
16.8 | Agent may assume receipt |
16.9 | Creditor Party accounts |
16.10 | Agent's memorandum account |
16.11 | Accounts prima facie evidence |
17 | APPLICATION OF RECEIPTS |
17.1 | Normal order of application |
(a) | FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents and the Master Agreement in the following proportions: |
(i) | first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents (in the case of the Master Agreement, in respect of any Transactions) other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrower under Clauses 20, 21 and 22 of this Agreement or by the Borrower or any Security Party under any corresponding or similar provision in any other Finance Document); |
(ii) | secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under any of the Finance Documents (in the case of the Master Agreement, in respect of any Transactions and, for this purpose, the expression "interest" shall include any net amount which the Borrower shall have become liable to pay or deliver under section Section 9(h) (Interest and Compensation) of the Master Agreement (in respect of any Transactions) but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and |
(iii) | thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder); |
(b) | SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document (in the case of the Master Agreement, in respect of any Transaction) but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states that in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this Clause; and |
(c) | THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it. |
17.2 | Variation of order of application |
17.3 | Notice of variation of order of application |
17.4 | Appropriation rights overriden |
18 | APPLICATION OF EARNINGS;SWAP PAYMENTS |
18.1 | Payment of Earnings and Swap Payments |
(a) | all the Earnings of the Ship are paid to the Earnings Account; and |
(b) | all payments by the Swap Bank to the Borrower under each Designated Transaction are paid to the Earnings Account. |
18.2 | Location of accounts |
(a) | comply with any requirement of the Agent as to the location or re-location of the Earnings Account; and |
(b) | execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Account. |
18.3 | Debits for fees, expenses etc. |
19 | EVENTS OF DEFAULT |
19.1 | Events of Default |
(a) | the Borrower or any Security Party fails to pay when due any sum payable under a Finance Document or under any document relating to a Finance Document; or |
(b) | any breach occurs of Clause 9.2, 11.2, 11.3, 11.9, 11.19, 11.20, 11.21, 12.2, 12.3, 14.2, 15.1 or 15.2; or |
(c) | any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 7 days after written notice from the Agent requesting action to remedy the same; or |
(d) | (subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c)); or |
(e) | any representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or |
(f) | any of the following occurs in relation to any Financial Indebtedness of a Relevant Person: |
(i) | any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or |
(ii) | any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or |
(iii) | a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or |
(iv) | any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or |
(v) | any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or |
(g) | any of the following occurs in relation to a Relevant Person: |
(i) | a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or |
(ii) | any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress or any form of freezing order in respect of a sum of, or sums aggregating, $100,000 or more or the equivalent in another currency or currencies; or |
(iii) | any administrative or other receiver is appointed over any asset of a Relevant Person; or |
(iv) | an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or |
(v) | any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or |
(vi) | a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or |
(vii) | a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or |
(viii) | an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or |
(ix) | a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or |
(x) | any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or |
(xi) | in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or |
(h) | the Borrower ceases or suspends carrying on its business or a part of its business which, in the reasonable opinion of the Majority Lenders, is material in the context of this Agreement; or |
(i) | it becomes unlawful in any Pertinent Jurisdiction or impossible: |
(i) | for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or |
(ii) | for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or |
(j) | any official consent necessary to enable the Borrower to own, operate or charter the Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document or the Approved Charter is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or |
(k) | it appears to the Majority Lenders that, without their prior consent, a change has occurred or probably has occurred after the date of this Agreement in the legal or the direct ownership of any of the shares in the Borrower or any other Security Party or in the control of the voting rights attaching to any of those shares; or |
(I) | any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or |
(m) | the security constituted by a Finance Document is in any way imperilled or in jeopardy; or |
(n) | any of the following occurs in relation to the Master Agreement: |
(i) | notice of an Early Termination Date is given by the Swap Bank under Section 6(a) of the Master Agreement; or |
(ii) | a person entitled to do so gives notice of Early Termination Date under Section (b)(iv) of the Master Agreement; or |
(iii) | an Event of Default (as defined in Section 14 of the Master Agreement) occurs; or |
(iv) | the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Swap Bank; or |
(o) | the Approved Charter is terminated or becomes invalid or unenforceable or otherwise ceases to be in full force and effect for any reason prior to its stated termination date; or |
(p) | without the prior written consent of the Agent any member of the EJP Family (either directly and/or indirectly through companies beneficially owned by any members of the EJP Family and/or trusts of foundations of which any member of the EJP Family are beneficiaries) ceases to own in aggregate at least 15 per cent. of the share capital of the Corporate Guarantor; |
(q) | without the prior written consent of the Agent, Mr Evangelos J. Pistiolis ceases to be the chief executive officer of the Corporate Guarantor; |
(r) | without the prior written consent of the Agent, the shares of the Corporate Guarantor cease to be listed in the NASDAQ; or |
(s) | any other event occurs or any other circumstances arise or develop including, without limitation: |
(i) | a change in the financial position, state of affairs or prospects of the Borrower, or the Corporate Guarantor; or |
(ii) | any accident or other event involving the Ship or another vessel owned, chartered or operated by a Relevant Person; or |
(iii) | the threat or commencement of legal or administrative action involving the Borrower, the Ship, either of the Approved Manager or any Security Party, |
19.2 | Actions following an Event of Default |
(a) | the Agent may, and if so instructed by the Majority Lenders, the Agent shall: |
(i) | serve on the Borrower a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or |
(ii) | serve on the Borrower a notice stating that all or part of the Loan together with accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or |
(iii) | take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders and/or the Swap Bank are entitled to take under any Finance Document or any applicable law; and/or |
(b) | the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Bank are entitled to take under any Finance Document or any applicable law. |
19.3 | Termination of Commitments |
19.4 | Acceleration of Loan |
19.5 | Multiple notices; action without notice |
19.6 | Notification of Creditor Parties and Security Parties |
19.7 | Creditor Party's rights unimpaired |
19.8 | Exclusion of Creditor Party liability |
(a) | for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or |
(b) | as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset, |
19.9 | Relevant Persons |
19.10 | Interpretation |
19.11 | Position of Swap Bank |
20 | FEES AND EXPENSES |
20.1 | Arrangement fee |
20.2 | Costs of negotiation, preparation etc. |
20.3 | Costs of variations, amendments, enforcement etc. |
(a) | any amendment or supplement to a Finance Document, or any proposal for such an amendment or supplement to be made; |
(b) | any consent or waiver by the Lenders, the Swap Bank, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver; |
(c) | the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; |
(d) | where the Security Trustee, in its absolute opinion, considers that there has been a material change to the insurances in respect of the Ship, the review of the insurance of the Ship pursuant to Clause 13.18; and |
(e) | the opinions of the independent insurance consultant referred to in paragraph 10 of Part D of Schedule 3; or |
(f) | any step taken by the Creditor Party concerned with a view to the preservation, protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose. |
20.4 | Documentary taxes |
20.5 | Financial Services Authority fees |
20.6 | Certification of amounts |
21 | INDEMNITIES |
21.1 | Indemnities regarding borrowing and repayment of Loan |
(a) | the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity; |
(b) | the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period; |
(c) | any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7); |
(d) | the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19, |
21.2 | Breakage costs |
(a) | in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and |
(b) | in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one. |
21.3 | Environmental Indemnity |
21.4 | Miscellaneous indemnities |
(a) | any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or |
(b) | any other Pertinent Matter, |
21.5 | Currency indemnity |
(a) | making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or |
(b) | obtaining an order or judgment from any court or other tribunal; or |
(c) | enforcing any such order or judgment, |
21.6 | Application to Master Agreement |
21.7 | Certification of amounts |
21.8 | Sums deemed due to a Lender |
22 | NO SET-OFF OR TAX DEDUCTION |
22.1 | No deductions |
(a) | without any form of set-off, counter-claim or condition; and |
(b) | free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make. |
22.2 | Grossing-up for taxes |
(a) | the Borrower shall notify the Agent as soon as it becomes aware of the requirement; |
(b) | the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and |
(c) | the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received. |
22.3 | Evidence of payment of taxes |
22.4 | Exclusion of tax on overall net income |
22.5 | Application to Master Agreement |
22.6 | FATCA Information |
(a) | Subject to paragraph (c) below, each party to a Finance Document shall, within ten Business Days of a reasonable request by another party to a Finance Document: |
(i) | confirm to that other party whether it is: |
(A) | a FATCA Exempt Party; or |
(B) | not a FATCA Exempt Party; |
(ii) | supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the purposes of that other party's compliance with FATCA; and |
(iii) | supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other party's compliance with any other law, regulation, or exchange of information regime. |
(b) | If a party to a Finance Document confirms to another party to a Finance Document pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly. |
(c) | Paragraph (a) above shall not oblige any Creditor Party to do anything, and paragraph (a)(iii) above shall not oblige any party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(I) | any law or regulation; |
(ii) | any fiduciary duty; or |
(iii) | any duty of confidentiality. |
(d) | If a party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the party in question provides the requested confirmation, forms, documentation or other information. |
22.7 | FATCA Deduction and gross-up by Borrower |
(a) | If Borrower or a Security Party is required to make a FATCA Deduction, such party shall make that FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA. |
(b) | If a FATCA Deduction is required to be made by Borrower or a Security Party, the amount of the payment due from such party shall be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required. |
(c) | Borrower shall promptly upon becoming aware that any party must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction) notify the Agent accordingly. Similarly, a Creditor Party shall notify the Agent on becoming so aware in respect of a payment payable to that Creditor Party. If the Agent receives such notification from a Creditor Party it shall notify Borrower. |
(d) | Within thirty days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, Borrower or the Security Party making that FATCA Deduction or payment shall deliver to the Agent for the Creditor Party entitled to the payment evidence reasonably satisfactory to that Creditor Party that the FATCA Deduction has been made or (as applicable) any appropriate payment has been paid to the relevant governmental or taxation authority. |
22.8 | FATCA Deduction by a Creditor Party |
(a) | Each Creditor Party may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and no Creditor Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. A Creditor Party which becomes aware that it must make a FATCA Deduction in respect of a payment to another party (or that there is any change in the rate or the basis of such FATCA Deduction) shall notify that party and the Agent. |
(b) | If the Agent is required to make a FATCA Deduction in respect of a payment to a Creditor Party under Clause 16.4 (Distribution of payments to Creditor Parties) which relates to a payment by Borrower or a Security Party, the amount of the payment due from that party shall be increased to an amount which (after the Agent has made such FATCA Deduction), leaves the Agent with an amount equal to the payment which would have been made by the Agent if no FATCA Deduction had been required. |
(c) | The Agent shall promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Creditor Party under Clause 16.4 (Distribution of payments to Creditor Parties) which relates to a payment by Borrower or a Security Party (or that there is any change in the rate or the basis of such a FATCA Deduction) notify Borrower and the relevant Creditor Party. |
(d) | Borrower shall (within three Business Days of demand by the Agent) pay to a Creditor Party an amount equal to the loss, liability or cost which that Creditor Party determines will be or has been (directly or indirectly) suffered by that Creditor Party as a result of another Creditor Party making a FATCA Deduction in respect of a payment due to it under a Finance Document. This paragraph shall not apply to the extent a loss, liability or cost is compensated for by an increased payment under paragraph (b) above. |
(e) | A Creditor Party making, or intending to make, a claim under paragraph (d) above shall promptly notify the Agent of the FATCA Deduction which will give, or has given, rise to the claim, following which the Agent shall notify Borrower. |
(f) | A Creditor Party must, on receiving a payment from Borrower or a Security Party under this Clause 22.8, notify the Agent. |
23 | ILLEGALITY, ETC |
23.1 | Illegality |
(a) | unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or |
(b) | contrary to, or inconsistent with, any regulation, |
23.2 | Notification of illegality |
23.3 | Prepayment; termination of Commitment |
23.4 | Mitigation |
(a) | have an adverse effect on its business, operations or financial condition; or |
(b) | involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or |
(c) | involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage. |
24 | INCREASED COSTS |
24.1 | Increased costs |
(a) | the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or |
(b) | complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement, |
24.2 | Meaning of "increased cost" |
(a) | an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums; |
(b) | a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital; |
(c) | an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or |
(d) | a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement; |
24.3 | Notification to Borrower of claim for increased costs |
24.4 | Payment of increased costs |
24.5 | Notice of prepayment |
24.6 | Prepayment; termination of Commitment |
(a) | on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and |
(b) | on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any). |
24.7 | Application of prepayment |
24.8 | Mitigation |
(a) | have an adverse effect on its business, operations or financial condition; |
(b) | involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or in consistent with, any regulation; or |
(c) | involve it in any expense (unless indemnified to its reasonable satisfaction) or tax disadvantage. |
25 | SET-OFF |
25.1 | Application of credit balances |
(a) | apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and |
(b) | for that purpose: |
(i) | break, or alter the maturity of, all or any part of a deposit of the Borrower; |
(ii) | convert or translate all or any part of a deposit or other credit balance into Dollars; and |
(iii) | enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate. |
25.2 | Existing rights unaffected |
25.3 | Sums deemed due to a Lender |
25.4 | No Security Interest |
26 | TRANSFERS AND CHANGES IN LENDING OFFICES |
26.1 | Transfer by Borrower |
(a) | its rights in respect of all or part of its Contribution; or |
(b) | its obligations in respect of all or part of its Commitment; or |
(c) | a combination of (a) and (b); or |
(d) | all or part of its credit risk under this Agreement and the other Finance Documents, |
26.3 | Transfer Certificate, delivery and notification |
(a) | sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee, each of the other Lenders and the Swap Bank; |
(b) | on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; |
(c) | send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above, |
26.4 | Effective Date of Transfer Certificate |
26.5 | No transfer without Transfer Certificate |
26.6 | Lender re-organisation; waiver of Transfer Certificate |
26.7 | Effect of Transfer Certificate |
(a) | to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents (other than the Master Agreement) are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender; |
(b) | the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate; |
(c) | the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate; |
(d) | the Transferee Lender becomes bound by all the provisions of the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them; |
(e) | any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed; |
(f) | the Transferee Lender becomes entitled to all the rights under the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and |
(g) | in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document (other than the Master Agreement), the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount. |
26.8 | Maintenance of register of Lenders |
26.9 | Reliance on register of Lenders |
26.10 | Authorisation of Agent to sign Transfer Certificates |
26.11 | Registration fee |
26.12 | Sub-participation; subrogation assignment |
26.13 | Disclosure of information |
26.14 | Change of lending office |
(a) | the date on which the Agent receives the notice; and |
(b) | the date, if any, specified in the notice as the date on which the change will come into effect. |
26.15 | Notification |
26.16 | Replacement of Reference Bank |
26.17 | Security over Lenders' rights |
(a) | any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities; |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by the Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
27 | VARIATIONS AND WAIVERS |
27.1 | Variations, waivers etc. by Majority Lenders |
27.2 | Variations, waivers etc. requiring agreement of all Lenders |
(a) | a reduction in the Margin; |
(b) | a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement; |
(c) | an increase in any Lender's Commitment; |
(d) | a change to the definition of " Majority Lenders "; |
(e) | a change to Clause 3 or this Clause 27; |
(f) | any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and |
(g) | any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required. |
27.3 | Exclusion of other or implied variations |
(a) | a provision of this Agreement or another Finance Document; or |
(b) | an Event of Default; or |
(c) | a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or |
(d) | any right or remedy conferred by any Finance Document or by the general law, |
28 | NOTICES |
28.1 | General |
28.2 | Addresses for communications |
(a)
|
to the Borrower:
|
c/o the Technical Manager
1 Vassilisis Sofias &
Megalou Alexandrou Street
Marousi 151 24
Greece
Fax No: +30 210 8056441
Attn: the Chief Financial Officer
|
(b)
|
to a Lender:
|
At the address below its name in Schedule 1 or (as the
case may be) in the relevant Transfer Certificate.
|
(c)
|
to the Agent:
|
Shipping Division
93 Akti Miaouli
185 38 Piraeus
Greece
Fax No: +30 210 4290268
Attn: the Manager
|
(d)
|
to the Security Trustee:
|
Shipping Division
93 Akti Miaouli
185 38 Piraeus
Greece
Fax No: +30 210 4290268
Attn: the Manager
|
(e)
|
to the Swap Bank:
|
Shipping Division
93 Akti Miaouli 185 38 Piraeus Greece Fax No: +30 210 4290268
Attn: the Manager
|
28.3 | Effective date of notices |
(a) | a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and |
(b) | a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed. |
28.4 | Service outside business hours |
(a) | on a day which is not a business day in the place of receipt; or |
(b) | on such a business day, but after 5 p.m. local time, |
28.5 | Illegible notices |
28.6 | Valid notices |
(a) | the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or |
(b) | in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been. |
28.7 | Electronic communication |
(a) | agree that, unless and until notified to the contrary, this is to be an accepted form of communication; |
(b) | notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and |
(c) | notify each other of any change to their respective addresses or any other such information supplied to them. |
28.8 | English language |
28.9 | Meaning of "notice" |
29 | SUPPLEMENTAL |
29.1 | Rights cumulative, non-exclusive |
(a) | cumulative; |
(b) | may be exercised as often as appears expedient; and |
(c) | shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law. |
29.2 | Severability of provisions |
29.3 | Counterparts |
29.4 | Third Party rights |
30 | LAW AND JURISDICTION |
30.1 | English law |
30.2 | Exclusive English jurisdiction |
30.3 | Choice of forum for the exclusive benefit of the Creditor Parties |
(a) | to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and |
(b) | to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
30.4 | Process agent |
30.5 | Creditor Party rights unaffected |
30.6 | Meaning of "proceedings" and "Dispute" |
Lender
|
Lending Office
|
Commitment
(US Dollars) |
ALPHA BANK A.E.
|
93 Akti Miaouli
185 38 Piraeus Greece |
20,125,000
|
1 | We refer to the loan agreement (the " Loan Agreement ") dated June 2014 and made between ourselves, as Borrower, the Lenders referred to therein, and yourselves as Agent, Swap Bank and as Security Trustee in connection with a secured post-delivery term loan facility of up to US$20,125,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice. |
2 | We request to borrow as follows: |
(a) | Amount: US$[•]; |
(b) | Drawdown Date: [•]; |
(c) | Duration of the first Interest Period shall be [•] months; and |
(d) | Payment instructions: account of [•] and numbered [•] with [•] of [•]. |
3 | We represent and warrant that: |
(a) | the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and |
(b) | no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan. |
4 | This notice cannot be revoked without the prior consent of the Majority Lenders. |
[Name of Signatory]
|
|
__________________________________ | |
for and on behalf of
MONTE CARLO 71 SHIPPING COMPANY LIMITED |
1 | A duly executed original of: |
(a) | this Agreement; |
(b) | the Master Agreement; |
(c) | the Master Agreement Assignment; |
(d) | the Corporate Guarantee; |
(e) | the Earnings Account Pledge; |
(f) | the Shares Pledge; and |
(g) | the Agency and Trust Agreement, |
2 | Copies of the certificate of incorporation and constitutional documents of the Borrower, the Corporate Guarantor and any other Security Party and any company registration documents in respect of the Borrower and any Security Party (including, without limitation, any corporate register excerpts) required by the Agent. |
3 | Copies of resolutions of the shareholders and directors of the Borrower and each Security Party authorising the execution of each of the Finance Documents to which each is a party and, in the case of the Borrower, authorising named officers and attorneys in fact to give the Drawdown Notice and other notices under this Agreement and, ratifying the execution of the Bill of Sale. |
4 | The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower, the Corporate Guarantor or any other Security Party. |
5 | The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Account. |
6 | Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment. |
7 | All documents required by the Agent in respect of the Borrower, the Corporate Guarantor and any other Security Parties to satisfy the Lenders "know your customer" requirements. |
8 | Copies of all consents which the Borrower or any other Security Party requires to enter into, or make any payment under any Finance Document. |
9 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Republic of the Marshall Islands and such other relevant jurisdictions as the Agent may require. |
10 | Copies of the Approved Charter and of all documents signed or issued by the Borrower and the Approved Charterer under or in connection with it. |
11 | Evidence that the fees payable to the Agent pursuant to Clause 20.1 have been paid by the Borrower. |
12 | Such documentary evidence as the Agent and its legal advisers may reasonably require in relation to the due authorisation and execution of the Approved Charterer of the Approved Charter and of all documents to be executed by the Approved Charterer thereunder. |
13 | If the Agent ender so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent. |
1 | A duly executed original of each of, the Mortgage, the General Assignment, the Approved Charter Assignment (and of each document to be delivered pursuant to each of them). |
2 | Documentary evidence that: |
(a) | the Ship has been unconditionally delivered by the Seller, and accepted by, the Borrower, and the full contract price payable by the Borrower (in addition to the part, if any, to be financed by the Loan) has been duly paid together with a copy of each of the documents delivered by the Seller to the Borrower (including but not limited to, the bill of sale, the commercial invoice and the protocol of delivery and acceptance); |
(b) | the Ship is provisionally, or as the case may be, permanently registered in the name of the Borrower under an Approved Flag; |
(c) | the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents; |
(d) | the Ship maintains the highest class with a classification society which is a member of IACS as the Agent may approve free of all recommendations and conditions of such classification society; |
(e) | the Mortgage has been duly registered or recorded against the Ship as a valid first preferred or, as the case may be, priority ship mortgage in accordance with the laws of the applicable Approved Flag State; and |
(f) | the Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with. |
3 | Documents establishing that the Ship will, as from the Drawdown Date, be managed by each Approved Manager on terms acceptable to the Lender, together with: |
(a) | each Approved Manager's Letter of Undertaking duly executed by the relevant Approved Manager; and |
(b) | copies of the Technical Manager's Document of Compliance and of the Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent may requires). |
4 | One valuation of the Ship, addressed to the Agent, stated to be for the purposes of this Agreement and dated not earlier than 30 days before the Delivery Date and prepared in accordance with Clause 15.3 which shows an average value for the Ship acceptable to the Agent. |
5 | Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the Marshall Islands or the Approved Flag State on which the Ship is registered and such other relevant jurisdictions as the Agent may require. |
6 | A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Ship as the Agent may require. |
7 | Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment. |
8 | Evidence satisfactory to the Agent that the Borrower has complied with its obligations under pursuant to Clause 11.20. |
9 | If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent. |
To: | [Name of Agent] for itself and for and on behalf of the Borrower, [each Security Party], [, the Security Trustee and each Lender, as defined in the Loan Agreement referred to below. |
1 | This Certificate relates to a Loan Agreement (the " Loan Agreement " ) dated [•] and made between (1) (the " Borrower "), (2) the banks and financial institutions named therein, (3) [•] as Agent, Swap Bank and (4) [•] as Security Trustee for a loan facility of up to US$[•]. |
2 | In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and: |
3 | The effective date of this Certificate is [•] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date. |
4 | The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document (other than the Master Agreement) in relation to [•] per cent. of its Contribution, which percentage represents $[•]. |
5 | By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[•]] [from [•] per cent. of its Commitment, which percentage represents $[•]] and the Transferee acquires a Commitment of $[•]. |
6 | The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents (other than the Master Agreement) which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect. |
7 | The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement. |
8 | The Transferor: |
(a) | warrants to the Transferee and each Relevant Party that: |
(i) | the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and |
(ii) | this Certificate is valid and binding as regards the Transferor; |
(b) | warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and |
(c) | undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose. |
9 | The Transferee: |
(a) | confirms that it has received a copy of the Loan Agreement and each other Finance Document; |
(b) | agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee or any Lender or the Swap Bank in the event that: |
(I) | any of the Finance Documents prove to be invalid or ineffective, |
(ii) | the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents; and |
(iii) | it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or Security Party under the Finance Documents; |
(c) | agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee or any Lender in the event that this Certificate proves to be invalid or ineffective; |
(d) | warrants to the Transferor and each Relevant Party that: |
(i) | it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and |
(ii) | this Certificate is valid and binding as regards the Transferee; and |
(e) | confirms the accuracy of the administrative details set out below regarding the Transferee. |
10 | The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees. |
11 | The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it. |
[Name of Transferor]
|
[Name of Transferee]
|
|
By:
|
By:
|
|
Date:
|
Date:
|
Agent
|
||
Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party
|
||
[Name of Agent]
|
||
By:
|
||
Date:
|
Note: | This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose. |
1 | The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank. |
2 | On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the "Additional Cost Rate") for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the Loan) and will be expressed as a percentage rate per annum. |
3 | The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in the Loan made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office. |
4 | The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows: |
E x
0.01
|
per cent. per annum
|
|
300
|
E | is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Bank to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000. |
5 | For the purposes of this Schedule: |
(a) | "Eligible Liabilities" and "Special Deposits" have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England; |
(b) | "Fees Rules" means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits; |
(c) | "Fee Tariffs" means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); |
(d) | "Participating Member State" means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and |
(e) | " Tariff Base " has the meaning given to it in, and will be calculated in accordance with, the Fees Rules. |
6 | If requested by the Agent, the Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by the Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by the Reference Bank as being the average of the Fee Tariffs applicable to the Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of the Reference Bank. |
7 | Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender: |
(a) | the jurisdiction of its lending office; and |
(b) | any other information that the Agent may reasonably require for such purpose. |
8 | The rates of charge of the Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash ratio deposits and special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office. |
9 | The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or the Reference Bank pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects. |
10 | The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 6 and 7 above. |
11 | Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties. |
1 | The Loan Agreement; |
2 | the Master Agreement dated [•] June 2014 made between ourselves and the Swap Bank; and |
3 | a Confirmation delivered pursuant to the said Master Agreement dated [S] 2014 and addressed by the Swap Bank to us. |
To: |
Alpha Bank A.E.
93 Akti Miaouli 185 38 Piraeus Greece |
(a) | the security cover ratio is 125 per cent or above; and |
(b) | the average credit balances standing to the credit of the accounts pursuant to and in compliance with Clause 11.20 is $1,000,000 or above. |
BORROWER
|
||
SIGNED
by Andreas Louka
|
)
/s/ Andreas Louka
|
NADINE AKLEH
/s/ Nadine Akleh
|
for and on behalf of
|
)
|
SOLICITOR
|
MONTE CARLO 71 SHIPPING COMPANY LIMITED
|
)
|
WATSON, FARLEY & WILLIAMS
|
in the presence of:
|
)
|
348 SYNGROU AVENUE
|
176 74 KALLITHEA
|
||
ATHENS - GREECE
|
LENDER
|
||
SIGNED
by Konstantinos Flokos
|
)
/s/ Konstantinos Flokos
|
WATSON, FARLEY & WILLIAMS
|
Christina Aroni
|
)
/s/ Christina Aroni
|
348 SYNGROU AVENUE
|
for and on behalf of
|
)
|
KALLITHEA 176 74
|
ALPHA BANK A.E.
|
)
|
ATHENS - GREECE
|
in the presence of:
|
)
|
TRAINEE SOLICITOR
|
Jessica Lever
|
/s/ Jessica Lever
|
|
SWAP BANK
|
||
SIGNED
by Konstantinos Flokos
|
)
/s/ Konstantinos Flokos
|
WATSON, FARLEY & WILLIAMS
|
Christina Aroni
|
)
/s/ Christina Aroni
|
348 SYNGROU AVENUE
|
for and on behalf of
|
)
|
KALLITHEA 176 74
|
ALPHA BANK A.E.
|
)
|
ATHENS - GREECE
|
in the presence of:
|
)
|
TRAINEE SOLICITOR
|
Jessica Lever
|
/s/ Jessica Lever
|
|
AGENT
|
||
SIGNED
by Konstantinos Flokos
|
)
/s/ Konstantinos Flokos
|
WATSON, FARLEY & WILLIAMS
|
Christina Aroni
|
)
/s/ Christina Aroni
|
348 SYNGROU AVENUE
|
for and on behalf of
|
)
|
KALLITHEA 176 74
|
ALPHA BANK A.E.
|
)
|
ATHENS - GREECE
|
in the presence of:
|
)
|
TRAINEE SOLICITOR
|
Jessica Lever
|
/s/ Jessica Lever
|
|
SECURITY TRUSTEE
|
||
SIGNED
by Konstantinos Flokos
|
)
/s/ Konstantinos Flokos
|
WATSON, FARLEY & WILLIAMS
|
Christina Aroni
|
)
/s/ Christina Aroni
|
348 SYNGROU AVENUE
|
for and on behalf of
|
)
|
KALLITHEA 176 74
|
ALPHA BANK A.E.
|
)
|
ATHENS - GREECE
|
in the presence of:
|
)
|
TRAINEE SOLICITOR
|
Jessica Lever
|
/s/ Jessica Lever
|
|
(a) | assign to the Buyers, in the form of the assignment attached to this Agreement as Annex 2 , with effect from the date of the Vessel's delivery such rights, title and interest as they have acquired, or may in the future acquire, to the warranties provided by the Vessel's builder, Hyundai Mipo Dockyard Co., Ltd., Ulsan, Korea (the "Builder") under Article IX of the shipbuilding contract dated 3 rd December, 2012 (as amended); |
(b) | notify the Builder about the said assignment in the form attached to the said assignment; and |
(c) | procure that the Builder acknowledges the receipt of the Sellers' notice of assignment in the form attached to the said assignment. |
(a) | the Bareboat Charter and all security documents annexed thereto having been signed and remaining in full force and effect; and |
(b) | the Buyers being satisfied that all conditions precedent under the Bareboat Charter have been satisfied or waived or will be satisfied or waived immediately upon delivery of the Vessel under the Bareboat Charter. |
(a) | at the request of any regulatory, supervisory or governmental authority; |
(b) | under any court process or pursuant to any statutory requirement ; or |
(c) | to auditors, external counsel or accountants ; or |
(d) | to their affiliates or subsidiaries: or |
(e) | in connection with any financing of the Vessel: or |
(f) | to any potential investors in the Buyers. |
(a) | Execution of this Agreement by all the parties thereto. |
(b) | The Bareboat Charter and all security documents annexed thereto having been executed by the parties thereto. |
(c) | The Option Agreement having been executed by the parties thereto. |
Signed by
|
Signed by
|
|
/s/ ANDREAS LOUKA
|
|
|
for and on behalf of
|
for and on behalf of
|
|
the Sellers
|
the Buyers
|
|
/s/ Andreas Louka
|
|
|
Monte Carlo 71
|
Eco Energy LLC
|
|
Shipping Company Limited
|
(a) | Execution of this Agreement by all the parties thereto. |
(b) | The Bareboat Charter and all security documents annexed thereto having been executed by the parties thereto. |
(c) | The Option Agreement having been executed by the parties thereto. |
Signed by
|
Signed by
|
|
|
/s/ JOHN HARTIGAN ATTORNEY IN FACT
|
|
for and on behalf of
|
for and on behalf of
|
|
the Sellers
|
the Buyers
|
|
|
/s/ John Hartigan
|
|
Monte Carlo 71
|
Eco Energy LLC
|
|
Shipping Company Limited
|
A. | Monte Carlo 71 Shipping Company Limited , having its registered office at Trust Company Complex , Ajeltake Road , Ajeltake Islands, Majuro, Marshall Islands. (the " Sellers ") as seller, and |
B. | Eco Energy LLC , having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, (the " Buyers ") as buyers, |
I. | The terms and expressions defined in the MoA shall have the same meaning as applied to them in the MoA when used in this Annex . |
II. | The following documents shall be delivered by the Sellers to the Buyers concurrently with the payment of the Purchase Price and the delivery of the Vessel: |
1. | Legal Bill of Sale in two (2) originals in a form recordable in Marshall Islands , warranting that the Vessel is free from all encumbrances, mortgages and maritime liens or any other claim or debts whatsoever, duly legalized and apostilled by Marshall Islands, registry |
2. | Permission to Transfer issued by the Marshall islands Ship Register, a faxed or emailed copy to be delivered in the closing meeting and the original within two (2) Banking Days after the delivery of the Vessel to the Buyers, |
3. | Certificate of Ownership and Encumbrance Issued by the Marshall Islands Ship Register on the delivery date immediately prior to the Vessel's delivery under the MoA, confirming that the Sellers are the registered owners of the Vessel and that the Vessel is free from any mortgages, liens or other encumbrances registered against the Vessel, |
4. | Copies of the Vessel's Continuous Synopsis Record certifying the date on which the Vessel has been registered with the Marshall Islands Ship Register, or, in the event that the registry does not as a matter of practice issue such certificates immediately, a Letter of Undertaking from the Sellers to provide the Buyers with closed CSR documents from the Marshall Islands Ship Register within thirty (30) Banking Days after the delivery of the Vessel to the Buyers, |
5. | Letter of irrevocable undertaking of the Sellers and confirmation that the Sellers shall take delivery of the Vessel from the Buyers under the Bareboat Charter Contract concurrently with the Vessel's delivery by the Sellers to the Buyers under the MOA, |
6. | Commercial Invoice for the Vessel, stating the main particulars and the Purchase Price of Vessel, duly signed by the Sellers, |
7. | Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate issued within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of condition/recommendation and confirming that Vessel's class is maintained, |
8. | satellite communication will remain in place |
9. | The Sellers' letter of confirmation that to the best of their knowledge, the Vessel has not touched bottom since her last drydocking, |
10. | The Sellers' letter of confirmation that to the best of their knowledge, the Vessel is not black listed by any nation or international organisation, |
11. | Certificate of good standing of the Sellers issued by the Marshall Islands Companies Registry, not older than ten (10) Banking Days prior to the date of the delivery of the Vessel. |
12. | Certified true copies of the Sellers' Articles of Association, including all amendments, addenda and supplements thereto, |
13. | Resolution of the Board of Directors and of the shareholders of the Sellers, executed by each of the Directors and the Shareholders, approving the signing of the MoA and the sale of the Vessel to the Buyers in accordance with the terms and conditions of the MoA and appointing and authorizing their representatives, inter alia, to deliver the Vessel, to execute the Protocol of Delivery and Acceptance, to receive the Purchase Price and as well as any other documents in connection with the Vessel's sale to the Buyers, |
14. | Original Power of Attorney by the Sellers, duly legalized, authorizing the attorney(s)-in-fact named therein to deliver the Vessel and to receive the Purchase Price and to sign all relevant documents, including , but not limited to, the Protocol of Delivery and Acceptance , and to deal and act with respect to all matters relating to the sale and the delivery of the Vessel to the Buyers, duly legalised by the MI and apostilled (Notaries in Greece do not notarise documents In foreign languages), |
15. | The Assignment of Warranty , one original and one copy of the notice of assignment, all duly executed by the Sellers. and the acknowledgement of the notice of assignment, duly executed by the Builder, all as referred to in clause 22 of this MoA, |
16. | Photocopies, certified as true, accurate and complete by a director or duly authorized attorney-in-fact, the secretary or the legal advisers of the Sellers, of: |
(i) | the Vessel's current Safety Construction, Safety Equipment , Safety Radio and Load Line Certificates: |
(ii) | evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990 |
(iii) | the Vessel's current SMC; |
(iv) | the ISM Company's current DOC; |
(v) | the Vessel's current ISSC; |
(vi) | the Vessel's current IAPPC; |
(vii) | the Vessel's current Tonnage Certificate |
17. | Any such additional documents as may reasonably be required by the competent authorities of the Buyers' Nominated Flag State for the purpose of registering the Vessel provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. |
III. | The following documents shall be delivered by the Buyers to the Sellers concurrently with the payment of the purchase price and the delivery of the Vessel: |
1. | Certificate of Formation issued by the Marshall Islands Companies Registry regarding the Incorporation and good standing of the Buyers , not older than ten (10) Banking Days prior to the date of the delivery of the Vessel. |
2. | Written Consent of the Sole Manager of the Buyers approving the signing of the MoA and the purchase of the Vessel from the Sellers in accordance with the terms and conditions of the MoA and appointing and authorizing their representatives, inter alia , to take delivery of the Vessel, to execute the Protocol of Delivery and Acceptance as well as any other documents in connection with the Vessel's purchase and to pay and release the purchase price to be paid for the Vessel to the Sellers. |
3. | Original Power of Attorney by the Buyers, duly legalized, authorizing the attomey(s)-in-fact named therein to take delivery of the Vessel and to pay the Purchase Price and to sign all relevant documents, including. but not limited to, the Protocol of Delivery and Acceptance, and to deal and act with respect to all matters relating to the purchase and the delivery of the Vessel to the Buyers. |
1
|
DEFINITIONS AND INTERPRETATION
|
2
|
2
|
ASSIGNMENT
|
3
|
3
|
REPRESENTATIONS AND WARRANTIES
|
3
|
4
|
MISCELLANEOUS
|
3
|
5
|
LAW AND JURISDICTION
|
3
|
(1) | ECO ENERGY LLC , a company incorporated in Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro. Marshall Islands (the " Assignee "); and |
(2) | MONTE CARLO 71 SHIPPING COMPANY LIMITED , a company Incorporated in Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road. Ajeltake Islands, Majuro, Marshall Islands (the "Assignor "). |
(A) | By a shipbuilding contract dated 3 rd December. 2012 (as from time to time amended, varied or supplemented the " Building Contract ") and made between Hyundai Mipo Dockyard Co., Ltd of Ulsan, Korea (the " Builder ") as builder and Million Hope Maritime S.A. of Majuro, Marshall Islands as buyer,novated by the said Million Hope Maritime S.A. to and in favour of the Assignor, the Builder agreed to build and deliver to the Assignor and the Assignor agreed to purchase and take delivery from the Builder of one 50,000 dwt class product/chemical tanker newbuildlng named "Stenaweco Energy", IMO No. 9683984 (the "Vessel"). |
(B) | The Vessel was delivered to the Assignor on _________________ 2014. |
(C) | By a memorandum of agreement dated ___ December, 2014 (as from time to lime amended, varied or supplemented the " MoA ") and made between the Assignor as seller and the Assignee as buyer the Assignor agreed to sell to the Assignee the Vessel and the Assignee agreed to purchase the Vessel from the Assignor . |
(D) | By bareboat charter contract dated ___ December, 2014 (as from time to time amended, varied or supplemented the " Bareboat Charter ") and made between the Assignee as owner and the Assignor as bareboat charterer the Assignor chartered the Vessel on demise from the Assignee. |
(E) | Pursuant to the terms and conditions of the MoA, the Assignor shall assign to the Assignee all the Assignor's rights, title and interest under the Building Contract with regard to the Builder's warranty as set forth in article IX of the Building Contract. |
1 | DEFINITIONS AND INTERPRETATION |
1.1 | Defined expressions. Words and expressions defined in the Bareboat Charter shall have the same meanings when used in this Deed unless the context otherwise requires. |
1.2 | Definitions . In this Deed, unless the contrary intention appears: |
1.3 | Inconsistency between MoA provisions and this Deed . This Deed shall be read together with the MoA, but in case of any conflict between the MoA and this Deed , the provisions of the MoA shall prevail. |
2 | ASSIGNMENT |
2.1 | Assignment. The Assignor , with full title guarantee , assigns to the Assignee absolutely, irrevocably and unconditionally all rights and interests which now or at any later time it has to, in or in connection with, the Assigned Property. |
2.2 | No obligations imposed on Assignee . The Assignor shall remain liable to perform all obligations connected with the Assigned Property and the Assignee shall not, in any circumstances , have or incur any obligation of any kind in connection with the Assigned Property . |
2.3 | Notice of assignment. Immediately after the execution of this Deed, the Assignor shall give to the Builder notice of the assignment contained in Clause 2.1 In the form set out in Appendix 1 and shall obtain from them signed acknowledgements in the form set out in that Appendix. |
3 | REPRESENTATIONS AND WARRANTIES |
3 . 1 | General. The Assignor represents and warrants to the Assignee as follows : |
3.2 | Title to Assigned Property . The Assignor is the sole legal and beneficial owner of the Assigned Property. |
3.3 | No restrict ions on right to assign. The Builder has given its consent to the Assigned Property being assigned to the Assignee and the Assignor has the right, without requiring the concurrence, consent or authority of any other person, to assign the Assigned Property to the Assignee. Moreover, the Builder has given its consent to the Assigned Property being on-assigned by the Assignee to its financing bank(s) and the Assignee has the right, without requiring the concurrence, consent or authority of any other person, to on-assign the Assigned Property to its financing bank(s). |
3 . 4 | No third party Security Interests. No third party has any security interest or any other right, interest or claim over, in or in relation to the Assigned Property . |
4 | MISCELLANEOUS |
4.1 | Severability of provisions . If any provision of this Deed is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of this Deed . |
4.2 | Third party rights . A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed . |
5 | LAW AND JURISDICTION |
5.1 | English law . Clause 16 of the MoA shall apply to this Deed as if it was expressly incorporated herein with any necessary modifications . |
5.2 | Exclusive English jurisdiction. Clause 16 of the MoA shall apply to this Deed as if it was expressly incorporated herein with any necessary modifications . |
5.3 | Choice of forum for the exclusive benefit of the Owner . Clause 5 . 2 is for the exclusive benefit of the Assignee, which reserves the rights: |
(a) | to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and |
(b) | to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
5.4 | Process agent . The Assignor irrevocably appoints Top Properties (London) limited, London, UK, at its registered office for the time being, presently at 8 Duke Street London W1U 3EW, Limited Kingdom, Fax-No. +44 207 224 5557, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute. |
5.5 | Assignee's rights unaffected . Nothing in this Clause 5 shall exclude or limit any right which the Assignee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process , the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction. |
5.6 | Meaning of "proceedings" . In this Clause 5, " proceedings '' means proceedings of any kind, including an application for a provisional or protective measure and a " Dispute " means any dispute arising out of or in connection with this Deed (including a dispute relating to the existence, validity or termination of this Deed) . |
From· |
Hyundai Mipo Dockyard Co., Ltd
100, Bankeojinsunhwan-Doro Dong-Gu Ufsan 682-712 South Korea |
To: |
Eco Energy LLC
Majuro, Marshall Islands c/o Northern Fund Management America, LLC One Stamford Landing 62 Southfield Avenue, Suite 212 Stamford, CT 06902 U.S. Attn: Kathleen Furman and Rich Lemanski Telefax in advance +1 (203) 487-3435 |
copy to: |
Monte Carlo One Shipping Company Limited
Majuro, Marshall Islands c/o Central Mare Inc 1 Vass . Sofias 151 24 Maroussi Attn: Andreas M. Louka Telefax in advance +30 2106141272 |
CALL OPTION AGREEMENT
|
EHLERMANN
RINDFLEISCH GADOW
RECHTSANW
Ă
LTE
PARTNERSCHAFT MBB
|
M/T "STENAWECO ENERGY"
|
|
BALLINDAMM 26. 20095 HAMBURG
|
|
TELEFON +49 40 37 48 14 - 0
|
|
TELEFAX +49 40 37 48 14 - 30
|
|
INTERNET WWW.ERG-LEGAL.COM
|
I. | Pursuant to the terms and conditions of a bareboat charter contract dated 30th December, 2014 (as from time to time amended, varied or supplemented the " Charter ") and made between the Owners as owners and the Option Holder as charterer, the Owners agreed to charter the Owner's Marshall Islands flag vessel " STENAWECO ENERGY ", IMO No. 9683984 (the " Vessel ") to the Option Holder. |
II. | The Vessel was originally sold to the Owners by the Option Holder pursuant to a memorandum of agreement dated 30th December, 2014 (as from time to time amended, varied or supplemented the " MOA ") and made beween the Option Holder as seller and the Owners as buyer. |
III. | Pursuant to clause 61.2.3 of the Charter, it shall be a condition precedent of the Charter that the Owners and the Option Holder execute a call option agreement on the terms and conditions detailed herein. |
1 | DEFINITIONS AND INTERPRETATION |
1.1 | Words and expressions defined in the Charter and not defined in this Agreement shall have the same meaning when used in this Agreement. |
1.2 | In this Agreement: |
1.2.1 | words denoting the plural number include the singular and vice versa; |
1.2.2 | words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa; |
1.2.3 | references to Recitals and Clauses are references to recitals and clauses of this Agreement; |
1.2.4 | references to this Agreement include the Recitals; |
1.2.5 | the headings and contents page(s) are for the purposes of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Agreement; |
1.2.6 | references to any document are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time; |
1.2.7 | references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted; |
1.2.8 | references to the Owners include its successors, transferees and assignees. |
2 | CONDITIONS PRECEDENT |
3 | CALL OPTION AND DEFAULT CALL OPTION |
3.1 | Commencing on the third anniversary of the Delivery Date and unless the Owners has served a Default Notice to the Option Holder, the Option Holder shall have the option (the " Call Option ") to purchase the Vessel from the Owners for the Call Option Price on a Call Option Date. The Call Option shall be exercisable by prior notice in writing (the " Call Option Notice ") to the Owners. |
3.2 | Notwithstanding Clause 3.1, in the event that the Owners has served a Default Notice on the Option Holder after the Delivery Date the Option Holder shall be entitled to exercise a Call Option and purchase the Vessel by delivering a Call Option Notice to the Owners. |
3.3 | The Call Option Notice must - |
3.3.1 | specify the Call Option Date, which |
3.3.1.1 | shall not be earlier than the first Banking Day falling 90 days after the Owners' receipt of the Call Option Notice for purposes of exercising a Call Option under Clause 3.1; or |
3.3.1.2 | shall not be earlier than 10 Banking Days after the Default Notice and not later than the first Banking Day falling 30 days after the Default Notice for purposes of |
3.3.2 | attach the Option MOA, duly populated and executed by the Option Holder. |
3.4 | Subject to Clause 6, once served, any Call Option Notice and the Call Option Date specified in it shall be irrevocable without the written consent of the Owners. |
3.5 | Following service of a Call Option Notice, the Owners shall be obliged to sell and the Option Holder shall be obliged to purchase the Vessel on the basis of the Option MOA for the Call Option Price on the Call Option Date. Upon service of Call Option Notice the attached Option MOA shall be deemed to constitute a binding contract between the parties without needing to be separately executed. |
4 | OPTION PREMIUM |
5 | COMPLETION |
6 | TERMINATION |
6.1 | In the event that a Default Notice is served by the Owners and unless the Option Holder delivers a Call Option Notice in terms of Clause 3.3.1.2, on the first Banking Day falling 30 days after the Default Notice: |
6.1.1 | the Call Option shall immediately cease to be exercisable; and |
6.1.2 | with immediate effect the parties shall cease to be obliged to fulfil the obligations of seller and buyer under the Option MOA with regard to the Call Option being exercised, although the Owners shall be entitled to retain any amount paid by way of deposit and apply it against any amount due under the Charter. |
6.2 | In the event that a Default Notice is served by the Owners on the third anniversary of the Delivery Date or thereafter, any Call Option Notice that may have been served under Clause 3.3.1.1 shall be deemed revoked and considered void. |
6.3 | In the event that the Charter terminates through the effluxion of time and the Call Option has not been exercised, the Call Option shall lapse and the Option Holder shall have no claim whatsoever on the Vessel. |
7 | OWNERS' RIGHT TO SELL |
8 | PAYMENT |
8.1 | Any payment required to be made under this Agreement or the Option MOA by the Option Holder shall be made to the Earnings Account or such other account as the Owners may specify unless otherwise indicated herein and shall be made net of all commissions and without any set-off or counterclaim whatsoever and free and clear of and without withholding or deduction for, or on account of, any present or future income, freight, stamp and other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any nature (collectively "Taxes" ) . If the Option Holder is required by law to make any withholding or deduction from any such payment, the sum due from the Option Holder in respect of such payment will be increased to the extent necessary to ensure that, after making such withholding or deduction, the Owners receive a net sum equal to the amount which it would have received had no such withholding or deduction been required to be made. The Option Holder will promptly deliver to the Owners any receipts, certificates or other proof evidencing the amounts, if any, paid or payable in respect of any such withholding or deduction as aforesaid. |
8.2 | Time shall be of the essence for the making of any payments or serving of any notices under this Agreement. |
9 | COMMUNICATION |
10 | RIGHTS OF THIRD PARTIES |
11 | INDEMNITY |
12 | GOVERNING LAW |
12.1 | This Agreement and the Option MOA attached to it, and any non-contractual obligations arising out of or in connection with them shall be governed and construed in accordance with English law and the courts of England and Wales shall have exclusive jurisdiction to determine the same. |
12.2 | The Option Holder hereby appoints Top Properties (London) Limited of 8 Duke Street London |
EXECUTED and DELIVERED as a DEED
|
/s/ John Hartigan
|
|||
by
|
JOHN HARTIGAN
|
As Attorney in Fact
|
||
for and on behalf of
|
||||
ECO ENERGY LLC
|
||||
In the presence of:
|
EXECUTED and DELIVERED as a DEED
|
|||||
by
|
ANDREAS LOUKA
|
/s/ Andreas Louka
|
|||
for and on behalf of
|
|||||
MONTE CARLO 71 SHIPPING
|
|||||
COMPANY LIMITED
|
|||||
In the presence of:
|
|||||
DIMITRA KARKALEYSI
|
/s/ Dimtra Karkaleysi
|
(a) | The Call Option Price shall be - |
(i.) | in the event that the Option Holder delivers a Call Option Notice under Clause 3.1, the Call Option Base Price set out below plus or minus any amounts referred to in paragraphs (b), (c), and (d): |
Call Option Date falling on
|
Call Option Base Price
|
Third Anniversary of the Delivery Date
|
USD 25,850,000
|
Fourth Anniversary of the Delivery Date
|
USD 24,800,000
|
Fifth Anniversary of the Delivery Date
|
USD 23,650,000
|
Sixth Anniversary of the Delivery Date
|
USD 22,525,000
|
Seventh Anniversary of the Delivery Date
|
USD 21,200,000
|
(ii.) | in the event that the Option Holder delivers a Call Option Notice under Clause 3.2, the Call Option Base Price set out below plus any amounts referred to in paragraphs (b)(i.) and (d): |
Call Option Date falling on
|
Call Option Base Price
|
First Anniversary of the Delivery Date
|
USD 30,000,000
|
Second Anniversary of the Delivery Date
|
USD 29,500,000
|
Third Anniversary of the Delivery Date
|
USD 25,850,000
|
Fourth Anniversary of the Delivery Date
|
USD 24,800,000
|
Fifth Anniversary of the Delivery Date
|
USD 23,650,000
|
Sixth Anniversary of the Delivery Date
|
USD 22,525,000
|
Seventh Anniversary of the Delivery Date
|
USD 21,200,000
|
(b) | The Call Option Price shall be - |
(i.) | increased by any break funding or swap termination costs as well as any other costs and expenses arising from the exercise of the Call Option for which the Owners may be liable; or |
(ii.) | reduced by any break funding or swap termination gain arising from the exercise of the Call Option to which the Owners may be entitled. |
(c) | To the extent that the Fair Market Value falls below USD 35,000,000, the Call Option Base Price shall be reduced by the Committed Capital Reduction Factor. |
(d) | In addition to and concurrently with the payment of the Call Option Price, the Option Holder shall pay to the Owners any and all other amounts owed by the Option Holder to the Owners under or in connection with this Agreement which are due but unpaid on the Call Option Date. |
(a) | assign to the Buyers, in the form of the assignment attached to this Agreement as Annex 2, with effect from the date of the Vessel's delivery such rights, title and interest as they have acquired, or may in the future acquire, to the warranties provided by the Builder under Article IX of the Building Contract; |
(b) | notify the Builder about the said assignment in the form attached to the said assignment; and |
(c) | procure that the Builder acknowledges the receipt of the Sellers' notice of assignment in the form attached to the said assignment. |
(a) | at the request of any regulatory, supervisory or governmental authority; |
(b) | under any court process or pursuant to any statutory requirement: or |
(c) | to auditors, external counsel or accountants; or |
(d) | to their affiliates or subsidiaries; or |
(e) | in connection with any financing of the Vessel; or |
(f) | to any potential investors in the Buyers. |
(a) | Execution of this Agreement by all the parties thereto. |
(b) | The Bareboat Charter and all security documents annexed thereto having been executed by the parties thereto. |
(c) | The Option Agreement having been executed by the parties thereto. |
Signed by
|
Signed by
|
|
Andreas Louka
|
John Hartigan as Attorney in Fact
|
|
for and on behalf of
|
for and on behalf of
|
|
the Sellers
|
the Sellers
|
|
/s/ Andreas Louka
|
/s/ John Hartigan
|
|
Monte Carlo One
|
Eco Evolution
|
|
Shipping Company Limited
|
A. | Monte Carlo One Shipping Company Limited, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, (the " Sellers ") as seller, and |
B. | Eco Evolution LLC, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands, (the " Buyers ") as buyers, |
I. | The terms and expressions defined in the MoA shall have the same meaning as applied to them in the MoA when used in this Annex. |
II . | The following documents shall be delivered by the Sellers to the Buyers concurrently with the payment of the Purchase Price and the delivery of the Vessel: |
1 | Legal Bill of Sale in two (2) originals in a form recordable in Marshall Islands, warranting that the Vessel is free from all encumbrances, mortgages and maritime liens or any other claim or debts whatsoever, duly legalized and apostilled by a Special Agent of the Marshall Islands, |
2. | Sellers' written confirmation, duly legalized and apostilled by a Special Agent of the Marshall Islands, that they have acquired title to the Vessel from the Builder and that they have immediately upon having acquired title to the Vessel from the Builder on-delivered the Vessel to the Buyers without creating any mortgage, lien or other encumbrance against the Vessel and without registering the Vessel in any ships registry, |
3. | Letter of irrevocable undertaking of the Sellers and confirmation that the Sellers shall take delivery of the Vessel from the Buyers under the Bareboat Charter Contract concurrently with the Vessel's delivery by the Sellers to the Buyers under the MOA, |
4. | Commercial Invoice for the Vessel, stating the main particulars and the Purchase Price of Vessel, duly signed by the Sellers, |
5. | Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate issued within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of condition/recommendation and confirming that Vessel's class is maintained, satellite communication will remain in place, |
6. | The Sellers' letter of confirmation that to the best of their knowledge, the Vessel has not touched bottom since her last drydocking, |
7. | The Sellers' letter of confirmation that to the best of their knowledge, the Vessel is not black listed by any nation or international organisation, |
8. | Certificate of good standing of the Sellers issued by the Marshall Islands Companies Registry, not older than ten (10) Banking Days prior to the date of the delivery of the Vessel, |
9. | Certified true copies of the Sellers' Articles of Association, including all amendments, addenda and supplements thereto, |
10 . | Resolution of the Board of Directors and of the shareholders of the Sellers, executed by each of the Directors and the Shareholders, approving the signing of the MoA and the sale of the Vessel to the Buyers in accordance with the terms and conditions of the MoA and appointing and authorizing their representatives, inter alia, to deliver the Vessel, to execute the Protocol of Delivery and Acceptance, to receive the Purchase Price and as well as any other documents in connection with the Vessel's sale to the Buyers, |
11. | Original Power of Attorney by the Sellers, duly legalized, authorizing the attorney(s)-in-fact named therein to deliver the Vessel and to receive the Purchase Price and to sign all relevant documents, including, but not limited to, the Protocol of Delivery and Acceptance, and to deal and act with respect to all matters relating to the sale and the delivery of the Vessel to the Buyers, duly legalized and apostilled by a Special Agent of the Marshall Islands, |
12. | The Assignment of Warranty, one original and one copy of the notice of assignment, all duly executed by the Sellers, and the acknowledgement of the notice of assignment, duly executed by the Builder, all as referred to in clause 22 of this MoA, |
13. | Photocopies, certified as true, accurate and complete by a director or duly authorized attorney-in-fact, the secretary or the legal advisers of the Sellers, of: |
(i) | the Vessel's current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates; |
(ii) | evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990; |
(iii) | the Vessel's current SMC; |
(iv) | the ISM Company's current DOC; |
(v) | the Vessel's current ISSC; |
(vi) | the Vessel's current IAPPC; |
(vii) | the Vessel's current Tonnage Certificate |
(viii) | all documents delivered by the Builder to the Sellers in connection with the Vessel's delivery under the Building Contract, including, but not being limited to, (a) the Builders Certificate, (b) the Bill of Sale, (c) evidence that the vessel has been delivered to the Sellers free and clear of any liens, mortgage or any other encumbrances whatsoever, (d) Builder's power of attorney, |
14. | Any such additional documents as may reasonably be required by the competent authorities of the Buyers' Nominated Flag State for the purpose of registering the Vessel provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. |
Ill. | The following documents shall be delivered by the Buyers to the Sellers concurrently with the payment of the purchase price and the delivery of the Vessel: |
1. | Certificate of Formation issued by the Marshall Islands Companies Registry regarding the incorporation and good standing of the Buyers, not older than ten (10) Banking Days prior to the date of the delivery of the Vessel, |
2. | Written Consent of the Sole Manager of the Buyers approving the signing of the MoA and the purchase of the Vessel from the Sellers in accordance with the terms and conditions of the MoA and appointing and authorizing their representatives, inter alia, to take delivery of the Vessel, to execute the Protocol of Delivery and Acceptance as well as any other documents in connection with the Vessel's purchase and to pay and release the purchase price to be paid for the Vessel to the Sellers, |
3. | Original Power of Attorney by the Buyers, duly legalized, authorizing the attorney(s)-in-fact named therein to take delivery of the Vessel and to pay the Purchase Price and to sign all relevant documents, including, but not limited to, the Protocol of Delivery and Acceptance, and to deal and act with respect to all matters relating to the purchase and the delivery of the Vessel to the Buyers. |
Clause
|
Page
|
|
1
|
DEFINITIONS AND INTERPRETATION
|
2
|
2
|
ASSIGNMENT
|
3
|
3
|
REPRESENTATIONS AND WARRANTIES
|
3
|
4
|
MISCELLANEOUS
|
3
|
5
|
LAW AND JURISDICTION
|
3
|
(1) | ECO EVOLUTION LLC , a company incorporated in Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands (the " Assignee "): and |
(2) | MONTE CARLO ONE SHIPPING COMPANY LIMITED , a company incorporated in Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands (the " Assignor "). |
1 | DEFINITIONS AND INTERPRETATION |
1.1 | Defined expressions . Words and expressions defined in the Bareboat Charter shall have the same meanings when used in this Deed unless the context otherwise requires. |
1.2 | Definitions . In this Deed, unless the contrary intention appears: |
1.3 | Inconsistency between MoA provisions and this Deed . This Deed shall be read together with the MoA, but in case of any conflict between the MoA and this Deed, the provisions of the MoA shall prevail. |
2 | ASSIGNMENT |
2.1 | Assignment . The Assignor, with full title guarantee, assigns to the Assignee absolutely, irrevocably and unconditionally all rights and interests which now or at any later time it has to, in or in connection with, the Assigned Property. |
22 | No obligations imposed on Assignee . The Assignor shall remain liable to perform all obligations connected with the Assigned Property and the Assignee shall not, in any circumstances, have or incur any obligation of any kind in connection with the Assigned Property. |
2.3 | Notice of assignment . Immediately after the execution of this Deed, the Assignor shall give to the Builder notice of the assignment contained in Clause 2.1 in the form set out in Appendix 1 and shall obtain from them signed acknowledgements in the form set out in that Appendix. |
3 | REPRESENTATIONS AND WARRANTIES |
3.1 | General . The Assignor represents and warrants to the Assignee as follows: |
3 2 | Title to Assigned Property . The Assignor is the sole legal and beneficial owner of the Assigned Property. |
3.3 | No restrictions on right to assign . The Builder has given its consent to the Assigned Property being assigned to the Assignee and the Assignor has the right, without requiring the concurrence, consent or authority of any other person, to assign the Assigned Property to the Assignee. Moreover, the Builder has given its consent to the Assigned Property being on-assigned by the Assignee to its financing bank(s) and the Assignee has the right, without requiring the concurrence, consent or authority of any other person, to on-assign the Assigned Property to its financing bank(s). |
3.4 | No third party Security Interests . No third party has any security interest or any other right, interest or claim over, in or in relation to the Assigned Property. |
4 | MISCELLANEOUS |
4.1 | Severability of provisions . If any provision of this Deed is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of this Deed. |
4.2 | Third party rights . A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed. |
5 | LAW AND JURISDICTION |
5.1 | English law . Clause 16 of the MoA shall apply to this Deed as if it was expressly incorporated herein with any necessary modifications. |
5.2 | Exclusive English jurisdiction . Clause 16 of the MoA shall apply to this Deed as if it was expressly incorporated herein with any necessary modifications. |
5.3 | Choice of forum for the exclusive benefit of the Owner . Clause 5.2 is for the exclusive benefit of the Assignee, which reserves the rights: |
(a) | to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and |
(b) | to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England. |
5.4 | Process agent . The Assignor irrevocably appoints Top Properties (London) Limited, London, UK, at its registered office for the time being, presently at 8 Duke Street London W1U 3EW, United Kingdom, Fax-No, +44 207 224 5557, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute. |
5.5 | Assignee's rights unaffected . Nothing in this Clause 5 shall exclude or limit any right which the Assignee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction. |
5.6 | Meaning of " proceedings ". In this Clause 5, " proceedings " means proceedings of any kind, including an application for a provisional or protective measure and a " Dispute " means any dispute arising out of or in connection with this Deed (including a dispute relating to the existence, validity or termination of this Deed). |
by
|
||
for and on behalf of
|
||
Monte Carlo One Shipping Company Limited
|
From:
|
Hyundai Mipo Dockyard Co., Ltd
100, Bankeojinsunhwan-Doro
Dong-Gu
Ulsan 682-712
South Korea
|
To:
|
Eco Evolution LLC
Majuro, Marshall Islands
c/o Northern Fund Management America, LLC
One Stamford Landing
62 Southfield Avenue, Suite 212
Stamford, CT 06902 U.S.
Attn: Kathleen Furman and Rich Lemanski
|
Telefax in advance +1 (203) 487-3435
|
|
copy to:
|
Monte Carlo One Shipping Company Limited
Majuro, Marshall Islands
c/o Central Mare Inc.
1 Vass. Sofias 151 24
Maroussi
Attn: Andreas M. Louka
|
Telexfax in advance +30 2106141272
|
by
|
||
for and on behalf of
|
||
Hyundai Mipo Dockyard Co., Ltd
|
CALL OPTION AGREEMENT
|
EHLERMANN
RINDFLEISCH
GADOW
RECHTSANWÄLTE
PARTNERSCHAFT MBB
|
M/T
"
STENAWECO EVOLUTION
"
|
|
BALLINDAMM 26. 20095 HAMBURG
|
|
TELEFON +49 40 37 48 14 - 0
|
|
TELEFAX +49 40 37 48 14 - 30
|
|
INTERNET WWW.ERG-LEGAL.COM
|
I. | Pursuant to the terms and conditions of a bareboat charter contract dated 30th December, 2014 (as from time to time amended, varied or supplemented the " Charter ") and made between the Owners as owners and the Option Holder as charterer, the Owners agreed to charter the Owner's Marshall Islands flag vessel " STENAWECO EVOLUTION ", IMO No. 9687942 (the " Vessel ") to the Option Holder. |
II. | The Vessel was originally sold to the Owners by the Option Holder pursuant to a memorandum of agreement dated 30th December, 2014 (as from time to time amended, varied or supplemented the " MOA ") and made between the Option Holder as seller and the Owners as buyer. |
III. | Pursuant to clause 61.2.3 of the Charter, it shall be a condition precedent of the Charter that the Owners and the Option Holder execute a call option agreement on the terms and conditions detailed herein. |
1 | DEFINITIONS AND INTERPRETATION |
1.1 | Words and expressions defined in the Charter and not defined in this Agreement shall have the same meaning when used in this Agreement. |
1.2 | In this Agreement: |
1.2.1 | words denoting the plural number include the singular and vice versa; |
1.2.2 | words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa; |
1.2.3 | references to Recitals and Clauses are references to recitals and clauses of this Agreement; |
1.2.4 | references to this Agreement include the Recitals; |
1.2.5 | the headings and contents page(s) are for the purposes of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Agreement; |
1.2.6 | references to any document are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time; |
1.2.7 | references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted; |
1.2.8 | references to the Owners include its successors, transferees and assignees. |
2 | CONDITIONS PRECEDENT |
3 | CALL OPTION AND DEFAULT CALL OPTION |
3.1 | Commencing on the third anniversary of the Delivery Date and unless the Owners has served a Default Notice to the Option Holder, the Option Holder shall have the option (the " Call Option ") to purchase the Vessel from the Owners for the Call Option Price on a Call Option Date. The Call Option shall be exercisable by prior notice in writing (the " Call Option Notice ") to the Owners. |
3.2 | Notwithstanding Clause 3.1, in the event that the Owners has served a Default Notice on the Option Holder after the Delivery Date the Option Holder shall be entitled to exercise a Call Option and purchase the Vessel by delivering a Call Option Notice to the Owners. |
3.3 | The Call Option Notice must - |
3.3.1 | specify the Call Option Date, which |
3.3.1.1 | shall not be earlier than the first Banking Day falling 90 days after the Owners' receipt of the Call Option Notice for purposes of exercising a Call Option under Clause 3.1; or |
3.3.1.2 | shall not be earlier than 10 Banking Days after the Default Notice and not later than the first Banking Day falling 30 days after the Default Notice for purposes of |
3.3.2 | attach the Option MOA, duly populated and executed by the Option Holder. |
3.4 | Subject to Clause 6, once served, any Call Option Notice and the Call Option Date specified in it shall be irrevocable without the written consent of the Owners. |
3.5 | Following service of a Call Option Notice, the Owners shall be obliged to sell and the Option Holder shall be obliged to purchase the Vessel on the basis of the Option MOA for the Call Option Price on the Call Option Date. Upon service of Call Option Notice the attached Option MOA shall be deemed to constitute a binding contract between the parties without needing to be separately executed. |
4 | OPTION PREMIUM |
5 | COMPLETION |
6 | TERMINATION |
6.1 | In the event that a Default Notice is served by the Owners and unless the Option Holder delivers a Call Option Notice in terms of Clause 3.3.1.2, on the first Banking Day falling 30 days after the Default Notice: |
6.1.1 | the Call Option shall immediately cease to be exercisable; and |
6.1.2 | with immediate effect the parties shall cease to be obliged to fulfil the obligations of seller and buyer under the Option MOA with regard to the Call Option being exercised, although the Owners shall be entitled to retain any amount paid by way of deposit and apply it against any amount due under the Charter. |
6.2 | In the event that a Default Notice is served by the Owners on the third anniversary of the Delivery Date or thereafter, any Call Option Notice that may have been served under Clause 3.3.1.1 shall be deemed revoked and considered void. |
6.3 | In the event that the Charter terminates through the effluxion of time and the Call Option has not been exercised, the Call Option shall lapse and the Option Holder shall have no claim whatsoever on the Vessel. |
7. | OWNERS' RIGHT TO SELL |
8 | PAYMENT |
8.1 | Any payment required to be made under this Agreement or the Option MOA by the Option Holder shall be made to the Earnings Account or such other account as the Owners may specify unless otherwise indicated herein and shall be made net of all commissions and without any set-off or counterclaim whatsoever and free and clear of and without withholding or deduction for, or on account of, any present or future income, freight, stamp and other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any nature (collectively " Taxes "). If the Option Holder is required by law to make any withholding or deduction from any such payment, the sum due from the Option Holder in respect of such payment will be increased to the extent necessary to ensure that, after making such withholding or deduction, the Owners receive a net sum equal to the amount which it would have received had no such withholding or deduction been required to be made. The Option Holder will promptly deliver to the Owners any receipts, certificates or other proof evidencing the amounts, if any, paid or payable in respect of any such withholding or deduction as aforesaid. |
8.2 | Time shall be of the essence for the making of any payments or serving of any notices under this Agreement. |
9 | COMMUNICATION |
10 | RIGHTS OF THIRD PARTIES |
11 | INDEMNITY |
12 | GOVERNING LAW |
12.1 | This Agreement and the Option MOA attached to it, and any non-contractual obligations arising out of or in connection with them shall be governed and construed in accordance with English law and the courts of England and Wales shall have exclusive jurisdiction to determine the same. |
12.2 | The Option Holder hereby appoints Top Properties (London) Limited of 8 Duke Street |
EXECUTED and DELIVERED as a DEED
|
/s/ John Hartigan
|
|||
by
|
JOHN HARTIGAN
|
As Attorney in Fact
|
||
for and on behalf of
|
||||
ECO EVOLUTION LLC
|
||||
in the presence of:
|
EXECUTED and DELIVERED as a DEED
|
||||
by
|
/s/ Andreas Louka
|
|||
for and on behalf of
|
||||
MONTE CARLO ONE SHIPPING
|
||||
COMPANY LIMITED
|
||||
in the presence of:
|
||||
DIMITRA KARKALEYSI
|
/s/ Dimtra Karkaleysi
|
(a) | The Call Option Price shall be - |
(i.) | in the event that the Option Holder delivers a Call Option Notice under Clause 3.1, the Call Option Base Price set out below plus or minus any amounts referred to in paragraphs (b), (c), and (d): |
Call Option Date falling on
|
Call Option Base Price
|
|
Third Anniversary of the Delivery Date
|
USD
|
25
,
850
,
000
|
Fourth Anniversary of the Delivery Date
|
USD
|
24
,
800
,
000
|
Fifth Anniversary of the Delivery Date
|
USD
|
23
,
650
,
000
|
Sixth Anniversary of the Delivery Date
|
USD
|
22
,
525
,
000
|
Seventh Anniversary of the Delivery Date
|
USD
|
21
,
200
,
000
|
(ii.) | in the event that the Option Holder delivers a Call Option Notice under Clause 3.2, the Call Option Base Price set out below plus any amounts referred to in paragraphs (b)(i.) and (d): |
Call Option Date falling on
|
Call Option Base Price
|
|
First Anniversary of the Delivery Date
|
USD
|
30
,
000
,
000
|
Second Anniversary of the Delivery Date
|
USD
|
29
,
500
,
000
|
Third Anniversary of the Delivery Date
|
USD
|
25
,
850
,
000
|
Fourth Anniversary of the Delivery Date
|
USD
|
24
,
800
,
000
|
Fifth Anniversary of the Delivery Date
|
USD
|
23
,
650
,
000
|
Sixth Anniversary of the Delivery Date
|
USD
|
22
,
525
,
000
|
Seventh Anniversary of the Delivery Date
|
USD
|
21
,
200
,
000
|
(b) | The Call Option Price shall be - |
(i.) | increased by any break funding or swap termination costs as well as any other costs and expenses arising from the exercise of the Call Option for which the Owners may be liable; or |
(ii.) | reduced by any break funding or swap termination gain arising from the exercise of the Call Option to which the Owners may be entitled. |
(c) | To the extent that the Fair Market Value falls below USD 35,000,000, the Call Option Base Price shall be reduced by the Committed Capital Reduction Factor. |
(d) | In addition to and concurrently with the payment of the Call Option Price, the Option Holder shall pay to the Owners any and all other amounts owed by the Option Holder to the Owners under or in connection with this Agreement which are due but unpaid on the Call Option Date. |
32. | DEFINITIONS |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Charter (or otherwise in order for the transactions contemplated by the Transaction Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the parties hereto: or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a party preventing that, or any other party: |
(i) | from performing its payment obligations under the Transaction Documents; or |
(ii) | from communicating with the other party in accordance with the terms of the Transaction Documents, |
(a) | any claim by any governmental, juridical or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; and |
(b) | any claim by any other person which relates to an Environmental Incident; |
(a) | any release or potential release of Environmentally Sensitive Material from the Vessel; and |
(b) | any incident in which Environmentally Sensitive Material is released or threatened to be released from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some incident of navigation or operation, in either case, in connection with which the Vessel is actually or potentially liable to be arrested and/or the Vessel and/or the Charterers and/or any operator or manager is at fault or allegedly at fault or otherwise liable to any legal or administrative action; and |
(c) | any other incident in which Environmentally Sensitive Material is released or threatened to be released otherwise than from the Vessel and in connection with which the Vessel is actually or potentially liable to be arrested and/or where the Charterers and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action. |
(a) | moneys borrowed and debit balances at banks or other financial institutions; |
(b) | any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent); |
(c) | any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
(d) | the amount of any liability in respect of any finance or capital lease or any bareboat charter; |
(e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
(f) | any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account); |
(g) | any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; |
(h) | any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the expiry of the Charter Period or are otherwise classified as borrowings under GAAP; |
(i) | any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 30 days after the date of supply; |
(j) | any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and |
(k) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in (a) to (j). |
(a) | to the Owners, whereby , throughout the Charter Period unless otherwise agreed by the Owners: |
(i) | it will remain the commercial and technical managers of the Vessel; |
(ii) | it will not , without the prior written consent of the Owners, subcontract or delegate the commercial or technical management of the Vessels (as the case may be) to any third party; |
(iii) | all claims of the Approved Managers against the Charterers and/or the Vessel shall be subordinated to the claims of the Owners and the Owners' Bank against the Charterers. |
(b) | to the Owners' Bank, whereby, throughout the Charter Period unless otherwise agreed by the Owners' Bank: |
(i) | it will remain the commercial and technical managers of the Vessel; |
(ii) | it will not, without the prior written consent of the Owners' Bank, subcontract or delegate the commercial or technical management of the Vessels (as the case may be) to any third party; |
(iii) | the interests of the Approved Managers in the Insurances will be assigned to the Owners' Bank with first priority; and |
(iv) | all claims of the Approved Managers against the Owners and/or the Vessel shall be subordinated to the claims of the Owners' Bank against the Owners. |
(a) | the ability of the Charterers and/or the Guarantor to perform their obligations under any Transaction Document; or |
(b) | the validity or enforceability of, or the effectiveness or ranking of any encumbrance granted or purporting to be granted pursuant to any of, the Transaction Documents or the rights or remedies of the Owners under any of the Transaction Documents. |
(a) | Encumbrances created or permitted by the Transaction Documents or otherwise with the prior written approval of the Owners' Bank; |
(b) | any netting or set-off arrangement entered into by the Charterers and/or the Guarantor in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances; |
(c) | any liens for masters' and crews' wages up to an aggregate amount at any time not exceeding the aggregate of one month of masters' and crews' wages; and |
(d) | any masters disbursements incurred in the ordinary course of trading and any other liens arising by operation of law or otherwise in the ordinary course of the operation, repair, employment or maintenance of a Vessel, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested in good faith by appropriate steps); |
(e) | any Encumbrance created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Charterers are actively prosecuting or defending such proceedings or arbitration in good faith; and |
(f) | any Encumbrance arising by operation of law in respect of Taxes in an amount of USD 50,000 or more which are not overdue for payment or in respect of which appropriate reserves have been made. |
(a) | any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Encumbrance or Quasi-Security given, or other transaction arising, under or permitted by the Transaction Documents; or |
(b) | any transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of any Encumbrance) conducted in the ordinary course owning and trading the Vessels on arm's length terms; or |
(c) | the entering into of the Call Option Agreement. |
(a) | its Original Jurisdiction; |
(b) | any jurisdiction where any asset subject to or intended to be subject to a Transaction Document to be executed by it is situated; |
(c) | any jurisdiction where it conducts its business; and |
(d) | the jurisdiction whose laws govern the perfection of any of the Transaction Documents entered into by it. |
(a) | imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America, whether or not the Charterers and/or the Guarantor or any Affiliate is legally bound to comply with the foregoing; |
(b) | under CISADA; |
(c) | in respect of (i) a "national" of any "designated foreign country", within the meaning of the Foreign Assets Control Regulations or the Cuban Asset Control Regulations of the United States Department of the Treasury, 31 C.F.R., Subtitle B, Chapter V, as amended, or (ii) a "specially designated national" listed by OFAC or any regulations or rulings issued thereunder, or |
(d) | otherwise imposed by any law or regulation or Executive Order by which the Owners, the Charterers and/or the Guarantor are bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of the Owners, the Charterers and/or the Guarantor, including without limitation laws or regulations or Executive Orders restricting loans to, investments in, or the export of assets to, foreign countries or entities doing business there. |
(a) | an actual, constructive, arranged, agreed or compromised total loss of the Vessel: or |
(b) | the requisition for title or compulsory acquisition of the Vessel by any government or other competent authority (other than by way of requisition for hire) unless it is within 30 days redelivered to the full control of the Owners or the Charterers; or |
(c) | the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not falling within (a) or (b)), unless the Vessel is released and returned to the possession of the Owners or the Charterers within the shorter of (i) 360 days and (ii) the wait period specified in the relevant kidnap and ransom Insurances. |
33. | CHARTER HIRE RATE |
33.1 | The Base Bareboat Rate is USD 8,800 per day and based on - |
33.1.1 | an Interest Rate Swap Rate of 2.25%, and |
33.1.2 | the Fair Market Value being no less than USD 35,000,000. |
33.2 | The charter hire rate referred to in Box 22 shall be the Base Bareboat Rate subject to adjustment as follows: |
33.2.1 | The Owners will revise the Base Bareboat Rate upon Delivery in order to reflect the Interest Rate Swap Rate with the cost or the benefit being for the account of the Charterers. The Base Bareboat Rate will be adjusted by USD 45.00 per day up or down for each 10bps change in the Interest Rate Swap Rate; |
33.2.2 | To the extent that the Fair Market Value falls below USD 35,000,000, the Base Bareboat Rate shall be reduced by the Committed Capital Reduction Factor; |
33.2.3 | The Base Bareboat Rate adjustment shall not result in the Base Bareboat Rate being greater than USD 8,800 per day except in the case of an upward LIBOR adjustment. |
34. | TRADING LIMITS |
34.1 | The Vessel shall be employed within British Institute warranty limits (IWL), excluding United |
34.2 | Should the Charterers wish to call at a port in the excluded countries/areas, as given aforesaid, the Owners and the Charterers shall discuss the conditions for each call which however, shall always be subject to Owners' final approval. Such approval not to be unreasonably withheld. |
34.3 | The Vessel shall not trade in any kind of ice or follow ice breakers. U.S. trading always to exclude Alaska. |
34.4 | The Charterers to have the option to trade into a war or warlike zone provided insurance coverage is obtainable for such entry and always subject to Owners' approval which not to be unreasonably withheld. Costs for such additional insurance coverage including but not limited to those attributable to closure (i.e. blocking and trapping), loss of hire and crew war bonus to be for Charterers account. |
35. | OWNERS' RIGHT TO SELL THE VESSEL |
35.1 | That such sale of the Vessel shall by no means affect the continuation of this Charter and the new owner shall comply in full with all terms and conditions of this Charter, and the new owner will be included in/bound by a customary novation agreement. |
35.2 | Any new owner always to be approved by Charterers, such approval not to be unreasonably withheld. |
36. | CHARTERERS' COVENANTS AND UNDERTAKINGS |
36.1 | The Charterers will for the duration of the Charter Period and, if longer, until such period as the Vessel is redelivered to the Owners in accordance with this Charter: |
36.1.1 | comply, with all applicable Environmental Laws in regard of the Vessel and will maintain in for ce and promptly obtain or renew all Environmental Approvals required to operate its business as from time to time conducted or reasonably anticipated to be conducted; |
36.1.2 | notify the Owners and the Owners' Bank forthwith by telefax or e-mail upon: |
36.1.2.1 | any Environmental Claim being made against it and/or any operator or the Approved Managers for the time being of the Vessel or otherwise in connection with the Vessel; and |
36.1.2.2 | any Environmental Incident occurring; |
36.1.3 | keep the Owners and any Mortgagee advised in writing on such regular basis and in such detail(s) as the Owners or any Mortgagee shall require, of its response to any Environmental Claim made in connection with the Vessel or any Environmental Incident; |
36.1.4 | indemnify the Owners and any Mortgagee against any loss and/or costs and/or Taxes of whatsoever nature it might incur deriving from an Environmental Claim or an Environmental Incident. |
36.2 | The Charterers undertake to the Owners that they will throughout the Charter Period and, if longer, |
36.2.1 | exercise due diligence to maintain the Vessel, its coatings, machinery and equipment in the condition specified in Appendix "A" and if and whenever the Vessel is not in such condition, exercise due diligence to put the Vessel in to such condition as soon as reasonably practicable. This Clause 36.2.1 shall be without prejudice to Charterers' absolute obligations in relation to the Vessel's return condition at redelivery; |
36.2.2 | keep the Vessel, and cause the Vessel to be kept, insured in accordance with the requirements of this Charter and at all times comply with all terms and conditions of such Insurances; |
36.2.3 | promptly inform the Owners of any damage to or alteration of the Vessel exceeding the value o f United States Dollars five hundred thousand (USD 500,000); |
36.2.4 | not cause or permit any ship under its control or ownership (including the Vessel) to proceed to, or remain at, any location to the extent prohibited by or subject to Sanctions; |
36.2.5 | not and do not hold a contract or any other obligation, to operate a ship (including the Vessel) contrary to any of the Sanctions; and |
36.2.6 | not (i) use or permit the use of a ship (including the Vessel) owned or controlled by it, for or on behalf of any person to transport Iranian oil or petroleum products refined in Iran, (ii) finance such trading and (iii) perform services, including financing services, or supply goods or technology that would benefit the Iranian oil industry. |
36.3 | The Charterers undertake throughout the Charter Period and until the Vessel is redelivered to Owners, if later, to comply, or to procure that the Approved Managers of the Vessel complies, with the ISM Code and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISM Code and at all times thereafter: |
36.3.1 | to hold, or to procure that the Approved Managers of the Vessel holds, a valid Document of Compliance (being a document issued to a vessel operator as evidence of its compliance with the requirements of the ISM Code) duly issued to the Charterers or the Approved Managers (as the case may be) pursuant to the ISM Code and a valid Safety Management Certificate (being a document issued to a vessel as evidence that the Approved Managers and its shipboard management operate in accordance with an approved structured and documented system enabling the personnel of the Vessel's operator to implement effectively the safety and environmental protection policy of that vessel operator) duly issued to the Vessel pursuant to the ISM Code, |
36.3.2 | to provide the Owners with copies of any such Document of Compliance and Safety Management Certificate as soon as the same are issued and after every renewal; and |
36.3.3 | to keep or to procure that there is kept, on board the Vessel a copy of any such Document of Compliance and the original of any such Safety Management Certificate. |
36.4 | The Charterers will comply with all applicable licenses, permits, and franchises issued or granted by any government authority in regard of the Vessel and this Charter and will maintain in force and promptly obtain or renew all such licenses, permits, and franchises required to operate its business as from time to time conducted or reasonably anticipated to be conducted; |
36.5 | The Charterers shall deliver to the Owners: |
36.5.1 | forthwith copies of any charter contract concluded for the Vessel and any and all amendments, supplements, side letters and additional agreements whatsoever in relation thereto; |
36.5.2 | upon the Owners' request, class certificates for hull and machinery and the Owners and any Mortgagee shall be permitted access to all reports of the Classification Society; |
36.5.3 | upon the Owners' request, information as to the employment and operation of the Vessel, Charterers' and each Charter Guarantor's financial status and prospects, details of trade debtors and trade payables and ageing and the Vessel's trading results on an open book basis. |
36.6 | The Charterers will maintain in force and promptly required to maintain the Security Interests created by the Transaction Documents and/or any additional Security Interests as the Owners or the Owners Bank may reasonably request; |
36.7 | The Charterers shall permit the Owners, at the Charterers' expense, to arrange for the Vessel to be fully surveyed once per year (for which purpose Charterers shall fully cooperate with all reasonable requirements of Owners for carrying out such survey) and the Charterers shall submit the Vessel to all periodical or other surveys which may be required for classification purposes at the Charterers' expense and shall provide the Owners with copies of all survey reports; |
36.8 | The Charterers shall permit the Owners (by surveyors or other persons appointed by them for that purpose) to board the Vessel at any time to inspect its condition or to satisfy themselves about proposed or executed repairs and/or to review the Vessel's operating and/or insurance records without interfering with the Vessel's operation and shall afford all proper facilities for such inspections and, to the extent that such inspections are additional to those surveys referred to in Clause 36.7 above, such inspections shall be at the cost of the Owners unless Charterers are found to be in breach of their maintenance obligations under this Agreement, in which event the relevant survey shall be for Charterers' account. |
36.9 | The Charterers undertake to the Owners that throughout the Charter Period and until the Vessel is redelivered in accordance with this Charter, if longer, the Charterers will not without the prior written consent of the Owners: |
36.9.1 | make any loans or advances to or any investments in any person (including, without limitation, any loan or advance to any officer, director, stockholder, employee or customer of the Charterers) unless necessary for the operation of the Vessel and provided the same are subject and subordinate in regard of their payment and their enforcement to any and all the Owners' rights under or pursuant to this Charter and the Transaction Documents; |
36.9.2 | assume, guarantee or endorse or otherwise provide security or become or remain liable in connection with any obligation of any person unless reasonably necessary for the Vessel's undisturbed operation; |
36.9.3 | authorize, accept or incur any capital commitments other than under the Transaction Documents; |
36.9.4 | make any alterations to the Vessel (Owners' consent not to be unreasonably withheld although it is understood that it shall always be reasonable to withhold consent where alterations would, in the opinion of Owners, limit the Vessel's marketability or diminish its value); |
36.9.5 | create, incur or allow to exist over the Vessel any security interests other than Security Interests created under the Transaction Documents; |
36.9.6 | part with physical control or possession of the Vessel; |
36.9.7 | permit any change of flag, management or dual-flagging of the Vessel; |
36.9.8 | bareboat charter out the Vessel to any third party; |
36.9.9 | appoint any technical or commercial managers unless it is an Approved Manager; |
36.9.10 | consolidate with or merge into any other corporation or merge any other corporation into the Charterers; |
36.9.11 | amend, vary, novate, supplement, supersede, waive or terminate any term of, any of the Transaction Documents or any other document delivered to the Owners and/or the Owners' Bank pursuant to Clause 61 |
36.10 | The Charterers undertake to the Owners to enter into any agreements, deeds, undertakings and other documents as the Owners may require in connection with any Senior Loan Agreement, or proposed Senior Loan Agreement, including, without limitation, entering in to such direct operating and insurance covenants in relation to the Vessel and security assignments as may be required by the Owners' Bank in relation to such Senior Loan Agreement and to procure that each Charter Guarantor shall acknowledge in such terms as the Owners may require notices of any security assignment entered into pursuant to any Senior Loan Agreement granting Security Interests over the Charter, the Charter Guarantee and/or the Share Pledge. |
36.11 | If (a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Charter; (b) any change in the status of the Charterers and/or the Guarantor after the date of this Charter; or (c) a proposed assignment or transfer by the Owners or the Owners' Bank of any of its rights and obligations under the Transaction Documents to a third party, obliges the Owners and/or the Guarantor (or, in the case of (c), any third party) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Charterers shall promptly upon the request of the Owners or the Owners' Bank supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Owners or the Owners' Bank (for itself or, in the case of the event described in (c), on behalf of any third party) in order for the Owners and/or the Owners' Bank or, in the case of the event described in (c), any third party to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Transaction Documents including without limitation obtaining, verifying and recording certain information and documentation that will allow the Owners and/or the Owners' Bank to identify the Charterers and/or the Guarantor in accordance with the requirements to the Patriot Act. |
36.12 | The Charterers shall promptly upon the request of the Owners and/or the Owners' Bank supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Owners and/or the Owners' Bank in order for the Owners and/or the Owners' Bank to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Transaction Documents. |
36.13 | The Charterers shall promptly (a) obtain, comply with and do all that is necessary to maintain in full |
36.13.1 | enable the Charterers and the Guarantor to perform its obligations under the Transaction Documents to which they are respectively a party; |
36.13.2 | ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document; and |
36.13.3 | enable the Charterers and/or the Guarantor to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect. |
36.14 | The Charterers shall ensure that at all times this Charter and the Transaction Documents constitute the valid and legally binding and enforceable obligations of the Charterers ranking at least pari passu with all other of their unsecured obligations and liabilities (actual or contingent) other than any mandatorily preferred by law and any Security Interests intended to be created thereby rank with their intended priority over the claims of other creditors; |
36.15 | The Charterers shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Owners and/or the Owners' Bank may reasonably specify (and in such form as the Owners and/or the Owners' Bank may reasonably require in favour of the Owners, the Owners' Bank and/or their nominee(s)): |
36.15.1 | to perfect any Encumbrance created or intended to be created under or evidenced by the Transaction Documents or the Senior Loan Agreement (which may include the execution of a mortgage, charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Transaction Documents or the Senior Loan Agreement) or for the exercise of any rights, powers and remedies of the Owners and/or the Owners' Bank provided by or pursuant to the Transaction Documents, the Senior Loan Agreement, or by law; |
36.15.2 | to confer on the Owners and/or the Owners' Bank an Encumbrance over any property and assets of that Charterers and/or the Guarantor located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Transaction Documents or the Senior Loan Agreement; and/or |
36.15.3 | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Documents. |
36.16 | The Charterers shall take all such action as is available to and requested of them (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Owners or the Owners' Bank by or pursuant to the Transaction Documents or the Senior Loan Agreement. |
37. | INSURANCES |
37.1 | With reference to Box 29 of this Charter, Charterers to insure that at all times the Vessel is properly and adequately insured with underwriters acceptable to the Owners and the Owners' Bank with such limits and such deductibles as the Owners and the Owners' Bank shall approve, naming the Owners' Bank as loss payee for any event of loss, together with an insurance broker undertaking to provide Owners' Bank with 14 days prior written notice of cancellation: |
37.1.1 | Protection and Indemnity cover, |
37.1.2 | Hull and Machinery Insurance, |
37.1.3 | War Risks Insurance, and |
37.1.4 | Other insurance required by the Owners, including but not limited to, Mortgagees Interest Insurance (MII) and Mortgagee's Interest Additional Perils (MIAP) to be placed at the request of the Owners at the Charterers expense. |
37.2 | The Charterers shall assign to the Owners all the Charterers' interests in the Insurances. Proceeds from Insurances for amounts less that USD 500,000 to be paid directly to the Charterers unless there is Total Loss or an Event of Default. In the event of a major casualty, no insurance proceeds in excess of USD 500,000 shall be paid to the Charterers or to the shipyard repair facility and associated repair suppliers by the insurers, unless with the prior written consent of the Owners which shall not be unreasonably withheld or delayed. The Charterers shall provide documentary evidence to the owners that the proceeds are used to discharge all repair related liabilities. In the event of Total Loss all insurance proceeds shall be received in full by the Owners (or their mortgagee as assignee) and applied by the Owners as follows: |
37.2.1 | First towards the Owners' or/and their mortgagees' costs incidental to the Total Loss; |
37.2.2 | Second towards any amounts due and payable by the Charterers to the Owners under the Charter; |
37.2.3 | Third towards any amount equal to the Call Option Base Price or if in between any two anniversaries of the Delivery Date the amount payable will be calculated by linear interpolation between the preceding and succeeding Call Option Base Price. |
37.2.4 | Fourth, any balance to be paid to the Charterers. |
37.3 | The Charterers (without prejudice to the terms of the assignments of insurances referred to in the Charterers' Assignment of the Insurances) shall procure that the interest of the Owners and the Owners' Bank shall be duly endorsed upon all slips, cover notes, policies, certificates of entry or other instruments of insurance issued or to be issued in connection with the Insurances aforesaid and to procure that the said slips, cover notes, policies, certificates of entry or other instruments of insurance issued or to be issued shall provide for fourteen (14) days prior written notice to be given to the Owners and the Owners' Bank by the brokers in the event of cancellation of insurance; |
37.4 | The Charterers shall inform the Owners promptly of any person named in the Insurances as an assured and cause each additional assured to execute and deliver to the Owners assignments of the Vessel's Insurances and notices of assignment substantially in the form of the relevant Charterers' Assignment and cause each such additional assured to execute and deliver to the Owners and the Owners' Bank its agreement in writing that the provisions of Clause 37.3 shall apply mutatis mutandis between the Owners and the Owners' Bank on the one side and the additional assured on the other side. |
38. | TIME CHARTER PARTIES |
38.1 | The Charterers shall procure that Stena Weco shall pay the hire payable under the Stena Weco Time Charter as from the Delivery Date to the Earnings Account. The Charterers shall deliver to the Owners a copy of the notice requiring Stena Weco to pay such hire to the Earnings Account. |
38.2 | The Charterers undertake to the Owners that they will throughout the Charter Period and, if longer, until such time as the Vessel is redelivered to Owners in accordance with the provisions of this Charter maintain an average minimum firm Time Charter cover across both Stena Vessels of six months at all times, such average calculated every time any one of the Stena Vessels is delivered under a new Time Charter as (A) the sum of (i) the firm term of such Time Charter plus (ii) the firm term of the Time Charter then in effect for the other vessel (B) divided by two. |
38.3 | The Charterers shall not enter into any employment contract in connection with the Vessel other than a Time Charter unless it shall be acceptable to the Owners' Bank. |
38.4 | Concurrent with its entry into a Time Charter, the Charterers shall assign the Time Charter to the Owners and either the Owners or the Charterers shall deliver to the Time Charterer a notice of the assignment to the Owners of the Time Charter and shall receive from such Time Charterer an acknowledgement of such assignment, and shall also request the Time Charterer to deposit all payments due under such Time Charter into the Earnings Account. |
39. | FINANCIAL STATEMENTS AND REPORTING |
39.1 | The Charterers shall deliver to the Owners - |
39.1.1 | annual US GAAP audited English language financial statements, certified by a major internationally recognised accounting firm, of both the Charterers and the Guarantor within 120 days of the fiscal year end; |
39.1.2 | quarterly US GAAP unaudited English language financial statements and business update of both the Charterers and the Guarantor within 90 days of the end of each quarter year period; |
39.1.3 | annual financial projections of the Guarantor within 60 days of the end of the fiscal year; and |
39.1.4 | any such other information reasonably requested by the Owners. |
39.2 | The Charterers shall notify the Owners and the Owners' Bank without delay when there is any event, development, litigation, investigation or circumstance that has had or could reasonably be expected to have a Material Adverse Effect on the business, assets (including vessel operations and performance), liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Vessel, the Guarantor, the Charterer, or Stena Weco, as well as their respective members, affiliates and subsidiaries, taken as a whole; |
39.3 | The Charterers shall promptly inform the Owners of any occurrence of which it becomes aware which may adversely affect its ability to perform the Charterers' obligations hereunder or under any Transaction Document or constitute an Event of Default, including but not being limited to any default under the Stena Weco Time Charter. |
39.4 | The Charterers shall deliver to the Owners and/or the Owners' Bank promptly, such information as the Owners and/or the Owners' Bank may reasonably require about the Vessel and compliance of the Charterers and the Guarantor with the terms of any Transaction Documents including without limitation cash flow analyses and details of the operating costs of the Vessel. |
39.5 | The Charterers shall deliver to the Owners and/or the Owners' Bank promptly on request, such further information regarding the financial condition, assets and operations of the Charterers and/or the Guarantor (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by the Charterers and/or the Guarantor under this Charter and an up to date copy of its shareholders' register (or equivalent in its jurisdiction)) as the |
39.6 | Promptly upon a request by the Owners and/or the Owners' Bank, the Charterers shall supply to the Owners and/or the Owners' Bank a certificate signed by two of its directors or senior officers on its behalf certifying that no Event of Default is continuing (or if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it). |
40. | CHARTERERS' UNDERTAKINGS IN RESPECT OF EARNINGS AND EARNINGS ACCOUNT |
40.1 | The Charterers shall ensure that, throughout the Charter Period, all of the Earnings are paid to the Earnings Account or, following the occurrence of an Event of Default or any event which, with the service of notice or passage of time may become an Event of Default, to such account as the Owners shall by notice require. |
40.2 | The Charterers shall comply with any requirement of the Owners as to the location or relocation of the Earnings Account and execute any documents which the Owners specify to create or maintain a Security Interest over the Earnings Account. |
40.3 | Provided no Event of Default has occurred and is continuing, all Earnings received shall be applied as follows: |
40.3.1 | First: payment of hire as provided in Clause 11 of this Charter; |
40.3.2 | Second: towards funding the Special Survey Reserve as provided in clause 41.1; |
40.3.3 | Third: any balance shall be released to the Charterers. |
40.4 | If there exists an Event of Default and as long as such Event of Default is continuing, any balance referred to in Clause 40.3.3 shall be applied as follows: |
40.4.1 | First: payment of all fees and costs incurred by the Owners under and in connection with the Event of Default; |
40.4.2 | Second: payment of default interest due and payable under this Charter; |
40.4.3 | Third: payment of hire as provided in Clause 11 of this Charter; |
40.4.4 | Fourth: towards funding the Special Survey Reserve as provided in Clause 41.1; |
40.4.5 | Fifth: any balance, unless this Charter has been terminated, shall be released to the Charterers. |
41. | SPECIAL SURVEY RESERVE |
41.1 | As of the third anniversary of the Delivery Date, the Charterers shall start paying a monthly instalment of USD 16,666.67 to the Earnings Account towards future costs of drydock and special class surveys. |
41.2 | The Owners shall release - |
41.2.1 | an amount not exceeding the actual documented cost of such drydock and special class survey to the Charterers, provided no Event of Default has occurred or is continuing, upon receipt by the Owners of reasonably acceptable documentation of the cost to complete or evidence of the completion of any such drydock or special class survey; |
41.2.2 | the Special Survey Reserve and any interest accrued thereon to the Charterers in the event that Charterers exercise a Call Option under clause 3 of the Call Option Agreement. |
42. | SECURITY |
42.1 | As security for their due and punctual performance under this Charter, the Charterers hereby agree that: |
42.1.1 | they will: |
(i) | assign to the Owners (a) all of their rights, title and interests in and to all policies and contracts of insurance (which expression includes all entries of the Vessel in protection and indemnity or war risks associations) which are from time to time taken out or entered into by the Charterers in respect of the Vessel pursuant to this Charter and (where the context permits) all benefits thereof, including all claims of any nature and returns of premium and (b) all monies whatsoever which are now, or later become, payable to the Charterers and which arise out of the use or operation of the Vessel, including (but not limited to) except to the extent that they fall within paragraph (ii), any earnings from any charter, all freight, hire and passage monies in substantially the same form as Appendix "B"; |
(ii) | assign to the Owners the Stena Weco Time Charter and deliver an acknowledgement of the assignment by the Time Charterer to the Owners all of which shall be in substantially the same form as Appendix "C" and |
42.1.2 | they will procure the issue by the Guarantor of a guarantee in favour of the Owners, guaranteeing the due and faithful performance by the Charterers of all their obligations under this Charter and any other agreements made between the Owners and the Charterers which shall be in substantially the same form as Appendix "D"; |
42.1.3 | they will procure the grant by the Charterers' shareholders of a share pledge on terms substantially the same as Appendix "E"; and |
42.1.4 | they will enter into any other agreements, execute any other documents and procure any securities in such form as the Owners may reasonably request to secure the Charterers' obligations under this Charter. |
43. | REPRESENTATIONS AND WARRANTIES |
43.1 | The Charterers acknowledge that the Owners have entered into this Charter in full reliance on representations by the Charterers in the following terms; and the Charterers now warrant to the Owners that the following statements are, at the date hereof, and on the Delivery Date will be, true and accurate:- |
43.1.1 | The Charterers are duly established and validly existing under the laws of the Republic of the Marshall Islands; |
43.1.2 | The Charterers have the power to conduct their business as it is now carried on, to own or hold under lease their assets, to execute, deliver and perform their obligations under this Charter, and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of this Charter; |
43.1.3 | This Charter and the Transaction Documents constitute the valid and legally binding and enforceable obligations of the Charterers ranking at least pari passu with all other of their unsecured obligations and liabilities (actual or contingent) other than any mandatorily preferred by law and any Security Interests intended to be created thereby rank with their intended priority over the claims of other creditors; |
43.1.4 | The entry into and performance by the Charterers of this Charter or any other Transaction Document to which it is a party does not, and will not during the Charter Period, violate (i) any existing law or regulation of any governmental or official authority or body to which the Charterers or their business operations are subject, or (ii) the constitutional documents of the Charterers, or (iii) any agreement, contract or other undertaking to which the Charterers are a party or which is binding on the Charterers or any of their assets; |
43.1.5 | All consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charter have been obtained and are, or will on and following the Delivery Date be, in full force and effect; |
43.1.6 | No litigation, arbitration or administrative proceeding is taking place against the Charterers or against any of their assets which is likely to be adversely determined and, if adversely determined, would have a Material Adverse Effect on the Charterers' ability to perform their obligations under this Charter and to the best of the Charterers' knowledge and belief no such actions, suits or proceedings have been threatened; |
43.1.7 | No Environmental Claim is being asserted against the Charterers and to the best of the Charterers' knowledge and belief no such Environmental Claim has been threatened; |
43.1.8 | The representations and warranties contained in each Charter Guarantee are, at the date thereof, and on the Delivery Date will be, true, accurate and complied with. |
43.1.9 | No corporate action, legal proceeding or other procedure or step described in Clause 44.1.8 or creditors' process described in Clause 44.1.14 has been taken or, to the knowledge of the Charterers, threatened in relation to the Charterers or the Guarantor; and none of the circumstances described in Clause 44.1.3 applies to the Charterers and the Guarantor. |
43.1.10 | No Event of Default and, on the date of this Charter, no Event of Default is continuing or is reasonably likely to result from the entry into, the performance of, or any transaction contemplated by, any of the Transaction Documents. |
43.1.11 | Save as disclosed in writing to the Owners, prior to the date of this Charter and to the knowledge of the Charterers: |
43.1.11.1 | any factual information provided by or on behalf of the Charterers and/or the Guarantor to the Owners was true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given; |
43.1.11.2 | any financial projection or forecast provided by or on behalf of the Charterers and/or the Guarantor to the Owners has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report or document containing the projection or forecast) and arrived at after careful consideration; |
43.1.11.3 | no event or circumstance has occurred or arisen and no information has been omitted and no information has been given or withheld that results in the information, |
43.1.11.4 | all material information provided to the Owners by or on behalf of any of the Charterers and/or the Guarantor on or before the date of this Charter and not superseded before that date is accurate and not misleading in any material respect and all projections provided to the Owners on or before the date of this Charter have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and |
43.1.11.5 | all other written information provided by any of the Charterers and/or the Guarantor (including its advisers) to the Owners was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect. |
43.1.12 | To the knowledge of the Charterers each of the Charterers' and the Guarantor's most recent financial statements delivered pursuant to Clause 39.1 give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate. |
43.1.13 | To the knowledge of the Charterers since the date of the most recent financial statements delivered pursuant to Clause 39.1 there has been no material adverse change in the business, assets or financial condition of any of the Charterers or the Guarantor. |
43.1.14 | To the knowledge of the Charterers none of the Charterers or the Guarantor has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect. Neither the Charterers nor the Guarantor is in violation of and none shall violate any of the country or list based economic and trade sanctions administered and enforced by OFAC, the European Union or the United Nations that are described or referenced at http://ustreas.gov/offices/enforcement/ofac or as otherwise published from time to time. |
43.1.15 | Each of the Charterers and the Guarantor is in compliance with Clause 36.1.1 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. |
43.1.16 | To the knowledge of the Charterers each of the Charterers and the Guarantor has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws. |
43.1.17 | The Charterers are not aware of any material facts or circumstances which have not been disclosed to the Owners and which might, if disclosed, have adversely affected the decision of a person considering whether or not to enter into any of the Transaction Documents. |
43.2 | Each Representation is deemed to be repeated by the Charterers by reference to the facts and circumstances then existing on the day of each charter hire payment. |
44. | DEFAULT CLAUSE |
44.1 | Any of the following events shall be an "Event of Default" for the purposes of this Charter: |
44.1.1 | if the Charterers and/or the Guarantor fail to pay when due any charter hire or any other sum |
44.1.2 | the Charterers and/or the Guarantor fails to fund the Special Survey Reserve; |
44.1.3 | the Stena Weco Time Charter or any other Time Charter is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date, provided that, in the event such occurrence is caused by a default of Stena Weco or any other Time Charterer, or by its actions or its failure to act, the Charterers shall have 30 days to replace it with a Time Charter in form and substance satisfactory to the Owners acting reasonably and in compliance with Clause 38.2; |
44.1.4 | the Charterers changes an Approved Manager without the prior written consent of the Owners, or fails to replace an Approved Manager within 30 Banking Days if requested by the Owners; |
44.1.5 | the Charterers changes the Vessel's class or flag without the prior written consent of the Owner; |
44.1.6 | the Charterers or the Guarantor are unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts, or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness; |
44.1.7 | a moratorium is declared in respect of any indebtedness of the Charterers or the Guarantor; if a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium; |
44.1.8 | any corporate action, legal proceedings or other procedure or step is taken for: |
44.1.8.1 | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) the Charterers or the Guarantor; |
44.1.8.2 | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of the Charterers or the Guarantor or any of their assets. |
44.1.9 | the Charterers fail to maintain any insurances as required under this Charter; |
44.1.10 | an Event of Default occurs under the Bareboat Charter II; |
44.1.11 | Any Financial Indebtedness of the Charterers or of the Guarantor or any of their respective Subsidiaries which are consolidated for accounting purposes: |
44.1.11.1 | is not paid when due nor within any originally applicable grace period; or |
44.1.11.2 | is declared to be, or otherwise becomes, due and payable prior to its specified |
44.1.11.3 | is capable of being declared by a creditor to be due and payable prior to its specified maturity as a result of such an event; or |
44.1.11.4 | is restructured in a manner that results, in aggregate, in a more favourable position for the affected lender. |
44.1.12 | if there is any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect on the business, assets (including vessel operations and performance), liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Vessel, the Guarantor and the Charterer as well as their respective members, affiliates and subsidiaries, taken as a whole; |
44.1.13 | any representation or statement made or deemed to be repeated by the Charterers and/or the Guarantor in any Transaction Document or any other document delivered by or on behalf of Charterers and/or the Guarantor under or in connection with any Transaction Document is or proves to have been incorrect or misleading when made or deemed to be made; |
44.1.14 | the Vessel is arrested or detained and such Vessel is not released from such arrest or detention within 30 days from the date of its arrest or detention; |
44.1.15 | it is or becomes unlawful for the Charterers and/or the Guarantor to perform any of its material obligations under the Transaction Documents or any Encumbrance created or expressed to be created or evidenced by the Transaction Documents ceases to be effective; |
44.1.16 | any material obligation or obligations of the Charterers and/or the Guarantor under any Transaction Document are not or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Owners and/or the Owners' Bank under the Transaction Documents; |
44.1.17 | any Transaction Document ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Transaction Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than the Owners and/or the Owners' Bank) to be ineffective; |
44.1.18 | any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration of any governmental, judicial or other public body or authority which is now, or which at any time during the Charter Period or before the Vessel is redelivered becomes, necessary to enable any of the Charterers or the Guarantor or any other person (except the Owners and/or the Owners' Bank) to comply with any of their obligations under any Transaction Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Owners considers is, or may be, prejudicial to the interests of the Owners and/or the Owners' Bank, or ceases to remain in full force and effect or the classification society for the Vessel withdraws the classification certificate for the Vessel; |
44.1.19 | any one of the Stena Vessels suffers a Total Loss or is otherwise destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Owners' Bank as security for the payment of all or any part of the Owners' indebtedness under the Senior Loan Agreement, except that a Total Loss (which term shall for |
44.1.19.1 | that Vessel or other vessel is insured in accordance with the Senior Loan Agreement and the Transaction Documents and a claim for Total Loss is available under the terms of the relevant insurances; and |
44.1.19.2 | no insurer has refused to meet the claim for Total Loss and it is not apparent to the Owners and the Owners' Bank in its reasonable discretion that any such refusal or dispute is likely to occur; and |
44.1.19.3 | payment of all insurance proceeds in respect of the Total Loss is made in full to the Owners' Bank within 120 days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Owners' Bank may in its discretion agree; |
44.1.20 | the country of registration of the Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Owners and/or the Owners' Bank in their discretion considers that, as a result, the security conferred by any of the Transaction Documents is materially prejudiced; |
44.1.21 | any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Transaction Documents or the transactions contemplated in the Transaction Documents or against the Charterers and/or the Guarantor or their assets which have or are reasonably likely to have a Material Adverse Effect; |
44.1.22 | any of the Charterers or the Guarantor, or an Affiliate of any of them becomes a Prohibited Person or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Prohibited Person or any of such persons becomes the owner or controller of a Prohibited Person; |
44.1.23 | any of the Charterers and/or the Guarantor, or any Affiliate of any of them is not in compliance with all Sanctions; |
44.1.24 | the Guarantor's Consolidated Leverage Ratio exceeds 75%; |
44.1.25 | the Guarantor does not maintain a minimum unrestricted liquidity at all times of (i) USD 750,000 per vessel owned (directly or through wholly-owned subsidiaries) by it and (ii) USD 500,000 per vessel bareboated in by the Guarantor or a wholly-owned subsidiary, in both cases measured and certified quarterly; |
44.1.26 | the Guarantor defaults under any other financial covenant that may be contained in any future material financing agreement (whether by senior or junior loans, notes or bareboat charters) entered into by the Guarantor or any other subsidiary thereof; |
44.1.27 | without prejudice to the foregoing, the Charterers or the Guarantor defaults on any of its material other obligations under this Charter. |
44.2 | Notwithstanding Clause 44.1, the Charterers shall have 30 days from the occurrence of any event described in Clauses 44.1.13, 44.1.15, 44.1.18, 44.1.21, 44.1.24, 44.1.25, and 44.1.26 to cure and/or remedy such event and only if the event is continuing after 30 days from the day on which the event first occurred shall that even constitute an Event of Default. |
44.3 | An Event of Default shall constitute a breach under the Charter. At any time after an Event of Default has occurred and is continuing, the Owners may by notice (the " Default Notice ") to the Charterers terminate this Charter and withdraw the Vessel either three days after the Default Notice having been given or at such later date as the Owners shall specify. Such right of termination shall be without prejudice to any claim the Owners may have against the Charterers. |
44.3.1 | Owners will submit to Charterers three independent valuations (desk top arms' length charter free basis) of the Vessel from Platou, Arrow and Fearnleys (or, in case any one or more of them no longer exist, any other internationally well reputed ship sale and purchase broker appointed by Owners), within 2 New York banking days of the date of the submission of the Default Notice. These three valuations will be used to evaluate the current fair market value (the " Sale Market Value " ) of the Vessel by using their simple arithmetic mean. |
44.3.2 | If the Sale Market Value is higher than the aggregate of (i) the Call Option Base Price (as referred to in Schedule 1 of the Call Option Agreement) (pro rata adjusted for in-between dates) calculated 60 days from the date the valuations were served to the Owners plus (ii) all amounts estimated by Owners for which Charterers are obliged to indemnify Owners under the Charter plus any break funding or swap termination costs estimated by Owners as well as any other costs and expenses estimated by Owners arising from the Event of Default and the termination of the Charter and the Vessel's sale for which Owners may be liable (the aggregate of (i) and (ii) above the "Aggregate Amount"), then Charterers can chose one of the three parties that provided the valuations to act as a sales agent. Owners shall then instruct the sales agent chosen by Charterers to find a buyer for the Vessel under the condition that, within 42 days from the date the Owners sent the Default Notice to Charterers, a sales contract is signed on NSF 2012 terms, under which the Vessel is sold at the highest market price and subject to such market price being greater than the Aggregate Sum, with a minimum deposit of 10% paid into a joint account, delivery is on "as is where is" basis without Owner's warranty (but Charterer's warranty, if appropriate and/or required) and the "cancelling date" (as per line 79 of the NSF 2012) being not later than 20 days from the date the MOA is entered into. It shall be understood that Owners shall use reasonable endeavours to the sell the Vessel but that the failure to sell the Vessel as described above, be it caused by the sales agent's failure or otherwise, shall not entitle the Charterers to any claims against Owners whatsoever, provided Owners have used reasonable endeavours to the sell the Vessel. |
44.3.3 | If the Sale Market Value is less than the Aggregate Amount, Owners shall have the rights under this Charter, including, but not being limited to, all hire accrued but unpaid under the Charter being paid to them and any other sums payable, but unpaid, under this Charter including all losses, expenses, fees and damages suffered by the Owners being paid to Owners. As soon as possible after the three independent valuations having been submitted to Owners, Owners shall provide Charterers with the final calculation of the amount due and payable to Owners under the Charter. Even after Owners having provided Charterers with the final calculation of the amount due and payable to Owners under the Charter, Owners shall have the right to claim losses, expenses, costs and fees incurred by Owners plus any amounts due to maritime liens on the Vessel incurred prior to the re-delivery of the Vessel to or its repossession by Owners. |
44.4 | Without prejudice to the foregoing provisions of this Clause 44, at any time after an Event of Default has occurred the Owners have the right to change the Approved Managers. |
45. | INSPECTION OF RECORDS |
46. | SHIP MANAGERS |
46.1 | The Charterers shall appoint S.A.M. Central Shipping Monaco of Monaco as technical and commercial managers of the Vessel, or any other third-party manager proposed by the Guarantor and reasonably acceptable to the Owners and the Owners' Bank, and, in all cases, to be employed under contract terms reasonably acceptable to the Owners' Bank and subject to the execution of the Managers' Undertakings. |
46.2 | S.A.M. Central Shipping Monaco shall be permitted to sub-contract certain management services to Central Mare Inc under contract terms reasonably acceptable to the Owners' Bank and subject to the execution of the Managers' Undertakings. |
46.3 | The Charterers undertake throughout the Charter Period and until the Vessel is redelivered to the Owners, if later, to comply, or to procure that the Approved Managers of the Vessel comply, with the ISM Code and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISM Code and at all times thereafter: |
46.3.1 | to hold, or to procure that the technical Approved Managers of the Vessel hold, a valid Document of Compliance (being a document issued to a vessel operator as evidence of its compliance with the requirements of the ISM Code) duly issued to the Charterers or the technical Approved Managers (as the case may be) pursuant to the ISM Code and a valid Safety Management Certificate (being a document issued to a vessel as evidence that the vessel's technical Approved Managers and its shipboard management operate in accordance with an approved structured and documented system enabling the personnel of the vessel's operator to implement effectively the safety and environmental protection policy of that vessel operator) duly issued to the Vessel pursuant to the ISM Code, |
46.3.2 | to provide the Owners with copies of any such Document of Compliance and Safety Management Certificate as soon as the same are issued and after every renewal; and |
46.3.3 | to keep or to procure that there is kept, on board the Vessel a copy of any such Document of Compliance and the original of any such Safety Management Certificate. |
46.3.4 | In the event that the Approved Managers from time to time fail to fulfil the obligations in Clause 46.3 or the Owners are not satisfied with the quality of the management services provided by the Approved Managers from time to time, the Owners may notify the Charterers and the Charterers promptly shall replace the Approved Managers. |
47. | ADDITIONAL EQUIPMENT |
48. | CHARTERERS INDEMNITY |
48.1 | The Charterers shall on demand indemnify and keep indemnified the Owners (the "Indemnified Parties") against: |
48.1.1 | All costs, charges, expenses, fees, taxes (including, without limitation, all costs, charges, expenses, fees and/or taxes to be imposed on the Owners by the Marshall Islands Ship Registry or other governmental bodies in the Marshall Islands), losses, payments, liabilities, penalties, fines, damages or other sanctions of a monetary nature (collectively, "Losses") suffered or incurred by the Owners and arising directly or indirectly in any manner out of the design, manufacture, delivery, non delivery, purchase, importation, registration, incorporation, ownership, management, chartering, sub-chartering, possession, control, use, operation, condition, maintenance, repair, replacement, refurbishment, modification, overhaul, insurance, sale or other disposal, return or storage of or loss of or damage to the Vessel or otherwise in connection with the Vessel (whether or not in the control or possession of the Charterers) including any and all claims in tort or in contract by a sub-charterer of the Vessel or by the holders of any bills of lading issued by the Charterers or any sub-charterer; and |
48.1.2 | All Losses suffered or incurred by the Owners which result directly or indirectly from claims which may at any time be made on the ground that any design, article or material of or in the Vessel or the operation or use thereof constitutes or is alleged to constitute an infringement of patent or copyright or registered design or other intellectual property right or any other right whatsoever; and |
48.1.3 | All Losses suffered or incurred by the Owners in preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Vessel, or in securing the release of the Vessel therefrom, and |
48.1.4 | All Losses suffered or incurred by the Owners and/or the Owners' Bank with respect to or as a direct result of the presence, escape, seepage, spillage, leaking, discharge or migration from the Vessel of oil or any other hazardous substance, including without limitation, any claims asserted or arising under the US Oil Pollution Act of 1990 or the US Comprehensive Environmental Response Compensation and Liability Act of 1980 (as either may be or have been amended and/or re-enacted from time to time) or similar legislation in any other jurisdiction, regardless of whether or not caused by or within the control of the Charterers and regardless of whether or not caused as a consequence of any deficiencies in the technical condition of the Vessel on the Delivery Date; and |
48.1.5 | All Losses suffered or incurred by the Owners and/or its respective officers or members of the management board or shareholders or members and/or any Mortgagee and any other Lenders, as a consequence of any violation by the Charterers or any sub-charterer of U.S. law or any other laws pursuant to which the Vessel and/or her trading or operations shall be subject from time to time; |
48.2 | If, under any applicable law, whether as a result of judgment against the Charterers or the liquidation |
48.3 | The indemnities contained in this Clause 48 shall survive any termination or other ending of this Charter and any breach of, or repudiation or alleged repudiation by, the Charterers or the Owners of this Charter, but the indemnities contained in this Clause 48 shall not apply if and to the extent that the relevant cost, charge, expense or Losses arise solely as a result of any fraudulent or willful misconduct, recklessness or gross and culpable negligence of the Indemnified Party claiming such indemnity. All moneys payable by the Charterers under this Clause 48 shall be paid on demand. |
49. | CREW |
50. | TAXES / DUES ETC |
51. | PRIVACY |
52. | PRIOR CLAIMS |
53. | MOA AND DELIVERY |
53.1 | The Owners' obligations to charter the Vessel to the Charterers hereunder are conditional upon delivery of the Vessel to the Owners by the Charterers pursuant to the MOA free and clear of any lien or encumbrance. |
53.2 | Subject to the Vessel being delivered to, and taken over by, the Owners, pursuant to the MOA, the Charterers shall forthwith be deemed to have taken delivery of the Vessel under this Charter simultaneously with delivery by the Charterers pursuant to the MOA. |
53.3 | The Delivery Date for the purpose of this Charter shall be the date when the Vessel is in fact delivered by the Charterers to the Owners pursuant to the MOA, whether that be before or after the scheduled date under the MOA, and the Owners shall be under no responsibility for any delay whatsoever in delivery of the Vessel to the Charterers under this Charter. |
53.4 | Without prejudice to the provisions of Clause 53.2 above, the Owners and the Charterers shall on the Delivery Date sign a Protocol of Delivery and Acceptance evidencing delivery of the Vessel hereunder. |
54. | CANCELLING |
55. | TERMS OF DELIVERY |
55.1 | The Charterers acknowledge and agree that the Owners make no condition, term, representation or warranty, express or implied (and whether statutory or otherwise) as to seaworthiness, merchantability, condition, design, operation, performance, capacity or fitness for use of the Vessel or as to the eligibility of the Vessel for any particular trade or operation or any other condition, term, representation or warranty whatsoever, express or implied, with respect to the Vessel. The Charterers expressly agree to accept delivery of the Vessel whether or not the Vessel is seaworthy, in good working order and repair and whether or not subject to any defect or inherent vice, and the Charterers agree, at their own cost, to remedy any defects and inherent vices (even if not known or discoverable at the time of delivery) and to put the Vessel into seaworthy condition and good working order and repair the Vessel to the extent that this is not the case. The Charterers further acknowledge and agree that the Owners make no warranty regarding the Vessel being free and clear of any encumbrance, mortgage, charge, lien, Security Interest or debt of whatsoever nature (together " Liens " ) other than that it shall be free of any Liens created by the Owners with the exception of Security Interests created pursuant to any financing requirements of the Owners. |
55.2 | Without prejudice to the provisions of Clause 55.1, the Charterers hereby waive all their rights in respect of any condition, term, representation, or warranty express or implied (and whether statutory or otherwise) on the part of the Owners and all claims against the Owners howsoever the same may arise, and whether already existing or in the future arising, in respect of the Vessel arising out of the operation or performance of the Vessel and the chartering thereof under this Charter (including in respect of the seaworthiness or otherwise of the Vessel) and, in particular and without prejudice to the generality of the foregoing, the Owners shall be under no liability whatsoever and howsoever arising in respect of any losses, costs, charges, expenses, fees, payments, liabilities, penalties, fines, damages or other sanctions of a monetary nature in respect of the injury, death, loss, damage or delay of or to or in connection with any person (which expression includes, but is not limited to, states, governments, municipalities and local authorities) or property whatsoever, whether on board the Vessel or elsewhere, irrespective of whether or when or where such injury, death, loss, damage or delay shall arise or of whether it shall arise as a result of the Vessel not being seaworthy or otherwise or of whether or not the Vessel or any part thereof is in the possession or under the control of the Charterers provided always that nothing in this Clause 55 shall exclude any liability of the Owners for death or |
55.3 | The Charterers agree that the Owners shall be under no liability to supply any replacement vessel or any piece or part thereof during any period when the Vessel is unusable and shall not be liable to the Charterers or any other person as a result of the Vessel being unusable. |
55.4 | Nothing contained in this Clause 55 shall be construed as a waiver of any rights or remedies of the Charterers at law or in equity against the Owners in respect of (a) any fraudulent or willful misconduct of the Owners or (b) any failure on the part of the Owners to comply with any of the terms of this Charter. |
56. | CHARTER HIRE |
56.1 | All payments under this Charter shall be made without any set-off or counterclaim whatsoever and free and clear of and without withholding or deduction for, or an account of, any present or future income, freight, stamp and other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any nature (collectively "Taxes"). If the Charterers are so required to make any withholding or deduction from any such payment, the sum due from the Charterers in respect of such payment will be increased to the extent necessary to ensure that, after making such withholding or deduction, the Owners receive a net sum equal to the amount which it would have received had no such withholding or deduction been required to be made. The Charterers will promptly deliver to the Owners any receipts, certificates or other proof evidencing the amounts, if any, paid to payable in respect of any such withholding or deduction as aforesaid. |
56.2 | The Charterers' obligations to pay hire shall, subject to the terms of this Charter, be absolute, irrespective of any contingency whatsoever, including (but not limited to): |
56.2.1 | any set-off, counterclaim, recoupment, defence, deduction, withholding or other right which the Charterers may have against the Owners or any other person; |
56.2.2 | any unavailability of the Vessel for any reason, including (but not limited to) Total Loss or any lack or invalidity of title (save where due to an act or omission of Owners unrelated to deficiencies in the title to the Vessel acquired by the Owners from the Seller) or any other defect in the title, condition, design, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade or for documentation under the laws of any country or any damage to the Vessel; |
56.2.3 | any insolvency, bankruptcy, reorganisation, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against the Owners unless it affects the Vessel's normal trading or operation. |
57. | TERMINATION ON EXERCISE OF CALL OPTION |
58. | REDELIVERY |
58.1 | In the event that the Vessel is redelivered to the Owners under this Charter, Charterers shall |
58.2 | Prior to redelivery at the port of redelivery as indicated in Box 16 Charterers shall arrange a redelivery survey, including but not being limited to an underwater survey, to ascertain and report on the condition of the Vessel, all machinery, equipment and coatings and a full inventory of items on board in order to ascertain whether the Vessel conforms with the requirements of Appendix "A" regarding return condition. Charterers shall indemnify Owners for the cost of such survey. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel's condition as set out in Appendix "A", then |
58.2.1 | unless repairs can be carried out afloat to the satisfaction of the Owners upon consultation with the Classification Society, the charterers shall arrange for the Vessel to be drydocked at their expense for inspection by the Owners; |
58.2.2 | such defects shall be made good by the Charterers at their cost and expense to the satisfaction of the Owners upon consultation with the Classification Society, and |
58.2.3 | the Charterers shall pay for any attendance by the Vessel's classification society. |
58.3 | As from the end of the 81 st month of the Charter Period, the Owners shall be free to market the Vessel for sale during the remaining Charter Period and the Charterers shall at all reasonable times requested by the Owners facilitate inspection of the Vessel by potential buyers, subject to the requirements of the Vessel's trading schedule; |
59. | FEES AND EXPENSES |
59.1 | Charterers shall fully indemnify Owners in respect of all costs, fees and expenses (including but not limited to legal fees and expenses) reasonably incurred by Owners in connection with the negotiation, preparation and execution of the Charter and the Transaction Documents, the Senior Loan Agreement (save for the costs of Owners' Bank's lawyers), valuation expenses, inspection expenses, insurance reports, the registration of the Vessel under the laws and flag of the Marshall Islands, and the maintenance of such registration. In case of any waiver required under or amendment to the Senior Loan Agreement as a result of any act or omission by the Charterers, the Charterers shall fully indemnify Owners in respect of all costs, fees and expenses (including but not limited to legal fees and expenses) reasonably incurred by Owners in connection with such waiver and/or amendment. |
59.2 | The Charterers shall pay to the Owners the Upfront Fee and the Commitment Fee as provided in the Fee Letter. |
60. | COMMUNICATION |
60.1 | Except as otherwise provided for in this Charter, all notices or other communications under or in respect of this Charter to either party hereto shall be in writing and shall be made or given to such party at the postal address, e-mail address or facsimile number appearing below (or at such other postal address, e-mail address or facsimile number as such party may hereafter specify for such purposes to the other by notice in writing):- |
60.1.1 | In the case of the Owners : |
60.1.2 | In the case of the Charterers : |
60.2 | A written notice given by; |
60.2.1 | post shall be deemed given on the fifth day following posting by pre-paid first class post to the addressee; |
60.2.2 | facsimile shall be deemed given upon appropriate confirmation by the sender's equipment; and |
60.2.3 | e-mail shall be deemed given two hours after dispatch. |
60.2.4 | A notice received on a non-Banking Day or after business hours in the place of receipt shall be deemed to be served on the next following Banking Day in such place. |
60.3 | All communications and documents delivered pursuant to or otherwise relating to this Charter shall be in English. |
61. | CONDITIONS PRECEDENT, EFFECTIVENESS OF THIS CHARTER |
61.1 | Notwithstanding anything to the contrary in this Charter, the obligations of the Owners under this Charter shall be subject to receipt by the Owners on or prior to the Delivery Date of the following, each in form and substance acceptable to the Owners in its discretion: |
61.1.1 | the Guarantor's consolidated financial projections for the next seven years, presented on a quarterly basis for the first 12 months and on an annual basis thereafter; |
61.1.2 | the Approved Management Agreements; |
61.1.3 | the Stena Weco Time Charter; |
61.1.4 | a copy of the notice requiring Stena Weco to pay such hire to the Earnings Account. |
61.1.5 | evidence as the Owners may reasonably require that the Vessel will, as from the Delivery Date, be insured in accordance with the provisions of this Charter and that all requirements of this Charter in respect of such insurances have been complied with; |
61.1.6 | such corporate documents of the Charterers and the Guarantor as the Owners' legal advisers may require (including but not being limited to powers of attorney, shareholders' resolutions, legal opinions, officer solvency certificates etc.); |
61.1.7 | all documentation and other information required by bank regulatory authorities under applicable "Know Your Customers", anti-money laundering rules and regulations as well as compliance with all sanction laws, including without limitation OFAC; |
61.1.8 | such documentation and other evidence as is reasonably required by the Owners to comply with their internal "Know Your Customers" guidelines or other checks in relation to the identity of any person that they are required by any applicable law to carry out in connection with entering into the Transaction Documents; |
61.1.9 | each Transaction Document duly executed by the parties named therein; |
61.1.10 | all notices and other documents required to be signed under the Transaction Documents and acknowledgements of such notices duly signed by all addressees of such notices, and (if then available, failing which the same shall be a condition subsequent to be satisfied within fifteen (15) days of the Delivery Date), evidence that all insurance policies have been endorsed with notices of assignment and loss payable clauses in accordance with the terms of the Charterers' Assignments; |
61.1.11 | an insurance report to be obtained by the Owners from an independent insurance consultant and to be satisfactory to the Owners; |
61.1.12 | a class confirmation certificate in respect of the Vessel issued by DNV-GL evidencing that the Vessel is confirming that the Vessel is classed with the highest class applicable to vessels of her type with no overdue recommendations or requirements against class; |
61.1.13 | on the Delivery Date, a copy of the current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates of the Vessel; |
61.1.14 | such confirmations from the Owners' legal advisers in such jurisdictions as it considers relevant that legal opinions in form and substance acceptable to the Owners will be issued on or following the Delivery Date; |
61.1.15 | documents establishing that the Vessel will, as from the Delivery Date, be managed by the Approved Manager on terms acceptable to the Owners, together with (i) the Managers' Undertakings in the form attached as Appendix "G" executed by the Approved Managers in favour of the Owners and the Owners' Bank, and (ii) copies of the Approved Manager's Document of Compliance and of the Vessel's Safety Management Certificate and International Ship Security Certificate (together with any details of the applicable safety management system which the Owners require); |
61.1.16 | the written confirmation of the Charterers and the Guarantor that there is no material dispute |
61.1.17 | confirmation in writing by the Guarantor that (i) no default has occurred and is continuing with respect to any Financial Indebtedness of the Guarantor and (ii) the Guarantor has no knowledge of any commitment for Financial Indebtedness for itself being cancelled or suspended by a creditor thereof as a result of any default; |
61.1.18 | a copy of any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration or other document, opinion or assurance which the Owners' Bank considers to be necessary or desirable (if the Charterers and/or the Guarantor has been notified accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Documents or for the validity and enforceability of any Transaction Document; |
61.1.19 | confirmation from the Charterers that no default has occurred and is continuing in respect of the Stena Weco Time Charter; |
61.1.20 | evidence that the Vessel has been accepted by the charterer under the Stena Weco Time Charter; and |
61.2 | Notwithstanding anything to the contrary in this Charter and without prejudice to Clause 61.1, this Charter shall not become effective unless each and all of the following conditions precedent are fulfilled: |
61.2.1 | Execution of this Charter by all the parties thereto; |
61.2.2 | Execution of the MOA by the parties thereto; |
61.2.3 | Execution of the Call Option Agreement by the parties thereto; |
61.2.4 | The Vessel having been registered in the name of the Owners under the laws of the Approved Flag; |
61.2.5 | A First Priority Mortgage having been duly filed and recorded with the Approved Flag; |
61.2.6 | No Event of Default having occurred and continuing unremedied, and no other event having occurred and continuing which with the giving of notice and/or lapse of time would, if not remedied, constitute an Event of Default; |
61.2.7 | Each of the representations and warranties contained in Clause 43 of this Charter being true and correct in all material respects on the Delivery Date by reference to the facts and circumstances then existing; |
61.2.8 | The Owners having, through their agents, carried out a full delivery condition survey of the Vessel and received from those agents a full report of that survey as to the physical condition of the Vessel, its coatings, machinery and equipment and detailed inventory in a form and substance satisfactory to the Owners and if, notwithstanding this condition precedent, Owners deliver the Vessel hereunder without having carried out such survey or without having received such report they shall be entitled to carry out and arrange the same at any time on any scheduled port call, even if this causes interference with the scheduling or operations of the Vessel; and |
61.2.9 | the Owners' Bank being satisfied that there is no event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect on the transactions |
62. | MISCELLANEOUS |
62.1 | No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to it other than the Owners' Bank and their respective officers or members of the management board or shareholders or members. |
62.2 | In the event of any amendment or variation to this Charter, no consent shall be required from any third party expressing to have rights under this Charter. |
62.3 | If there is any conflict between the terms of the additional clauses and the printed part of this Charter, the terms of the additional clauses shall prevail. |
62.4 | This Charter and the other Transaction Documents constitute the whole agreement between the parties relating to the subject matter hereof and replace any prior correspondence, documents, agreements, discussions and/or representations in their entirety, save to the extent that additional documentation or information is required by the terms of Transaction Document to be provided by one party or its affiliate to the other party or its affiliate. |
EXECUTED
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by Andreas Louka
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/s/ Andreas Louka
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expressly authorised in accordance with
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the laws of the Marshall Islands
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by virtue of a power of attorney granted
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by Monte Carlo 71 Shipping Company Limited
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ACKNOWLEDGED
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by ___________________________
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32. | DEFINITIONS |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Charter (or otherwise in order for the transactions contemplated by the Transaction Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the parties hereto; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a party preventing that, or any other party: |
(i) | from performing its payment obligations under the Transaction Documents; or |
(ii) | from communicating with the other party in accordance with the terms of the Transaction Documents, |
(a) | any claim by any governmental, juridical or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; and |
(b) | any claim by any other person which relates to an Environmental Incident; |
(a) | any release or potential release of Environmentally Sensitive Material from the Vessel; and |
(b) | any incident in which Environmentally Sensitive Material is released or threatened to be released from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some incident of navigation or operation, in either case, in connection with which the Vessel is actually or potentially liable to be arrested and/or the Vessel and/or the Charterers and/or any operator or manager is at fault or allegedly at fault or otherwise liable to any legal or administrative action; and |
(c) | any other incident in which Environmentally Sensitive Material is released or threatened to be released otherwise than from the Vessel and in connection with which the Vessel is actually or potentially liable to be arrested and/or where the Charterers and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action. |
(a) | moneys borrowed and debit balances at banks or other financial institutions; |
(b) | any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent); |
(c) | any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
(d) | the amount of any liability in respect of any finance or capital lease or any bareboat charter; |
(e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
(f) | any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account); |
(g) | any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; |
(h) | any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the expiry of the Charter Period or are otherwise classified as borrowings under GAAP; |
(i) | any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 30 days after the date of supply; |
0) | any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and |
(k) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in (a) to (j). |
(a) | to the Owners, whereby, throughout the Charter Period unless otherwise agreed by the Owners: |
(i) | it will remain the commercial and technical managers of the Vessel; |
(ii) | it will not, without the prior written consent of the Owners, subcontract or delegate the commercial or technical management of the Vessels (as the case may be) to any third party; |
(iii) | all claims of the Approved Managers against the Charterers and/or the Vessel shall be subordinated to the claims of the Owners and the Owners' Bank against the Charterers. |
(b) | to the Owners' Bank, whereby, throughout the Charter Period unless otherwise agreed by the Owners' Bank: |
(i) | it will remain the commercial and technical managers of the Vessel, |
(ii) | it will not, without the prior written consent of the Owners' Bank, subcontract or delegate the commercial or technical management of the Vessels (as the case may be) to any third party; |
(iii) | the interests of the Approved Managers in the Insurances will be assigned to the Owners' Bank with first priority; and |
(iv) | all claims of the Approved Managers against the Owners and/or the Vessel shall be subordinated to the claims of the Owners' Bank against the Owners. |
(a) | the ability of the Charterers and/or the Guarantor to perform their obligations under any Transaction Document; or |
(b) | the validity or enforceability of, or the effectiveness or ranking of any encumbrance granted or purporting to be granted pursuant to any of, the Transaction Documents or the rights or remedies of the Owners under any of the Transaction Documents. |
(a) | Encumbrances created or permitted by the Transaction Documents or otherwise with the prior written approval of the Owners' Bank; |
(b) | any netting or set-off arrangement entered into by the Charterers and/or the Guarantor in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances; |
(c) | any liens for masters' and crews' wages up to an aggregate amount at any time not exceeding the aggregate of one month of masters' and crews' wages; and |
(d) | any masters disbursements incurred in the ordinary course of trading and any other liens arising by operation of law or otherwise in the ordinary course of the operation, repair, employment or maintenance of a Vessel, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested in good faith by appropriate steps); |
(e) | any Encumbrance created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Charterers are actively prosecuting or defending such proceedings or arbitration in good faith; and |
(f) | any Encumbrance arising by operation of law in respect of Taxes in an amount of USD 50,000 or more which are not overdue for payment or in respect of which appropriate reserves have been made. |
(a) | any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Encumbrance or Quasi-Security given, or other transaction arising, under or permitted by the Transaction Documents; or |
(b) | any transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of any Encumbrance) conducted in the ordinary course owning and trading the Vessels on arm's length terms; or |
(c) | the entering into of the Call Option Agreement. |
(a) | its Original Jurisdiction; |
(b) | any jurisdiction where any asset subject to or intended to be subject to a Transaction Document to be executed by it is situated; |
(c) | any jurisdiction where it conducts its business; and |
(d) | the jurisdiction whose laws govern the perfection of any of the Transaction Documents entered into by it. |
(a) | imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America, whether or not the Charterers and/or the Guarantor or any Affiliate is legally bound to comply with the foregoing; |
(b) | under CISADA; |
(c) | in respect of (i) a "national" of any "designated foreign country", within the meaning of the Foreign Assets Control Regulations or the Cuban Asset Control Regulations of the United States Department of the Treasury, 31 C.F.R., Subtitle B, Chapter V, as amended, or (ii) a "specially designated national" listed by OFAC or any regulations or rulings issued thereunder, or |
(d) | otherwise imposed by any law or regulation or Executive Order by which the Owners, the Charterers and/or the Guarantor are bound or, as regards a regulation, compliance with which is reasonable in the ordinary course of business of the Owners, the Charterers and/or the Guarantor, including without limitation laws or regulations or Executive Orders restricting loans to, investments in, or the export of assets to, foreign countries or entities doing business there. |
(a) | an actual, constructive, arranged, agreed or compromised total loss of the Vessel; or |
(b) | the requisition for title or compulsory acquisition of the Vessel by any government or other competent authority (other than by way of requisition for hire) unless it is within 30 days redelivered to the full control of the Owners or the Charterers; or |
(c) | the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not falling within (a) or (b)), unless the Vessel is released and returned to the possession of the Owners or the Charterers within the shorter of (i) 360 days and (ii) the wait period specified in the relevant kidnap and ransom Insurances. |
33. | CHARTER HIRE RATE |
33.1 | The Base Bareboat Rate is USD 8,800 per day and based on - |
33.1.1 | an Interest Rate Swap Rate of 2.25%, and |
33.1.2 | the Fair Market Value being no less than USD 35,000,000. |
33.2 | The charter hire rate referred to in Box 22 shall be the Base Bareboat Rate subject to adjustment as follows: |
33.2.1 | The Owners will revise the Base Bareboat Rate upon Delivery in order to reflect the Interest Rate Swap Rate with the cost or the benefit being for the account of the Charterers. The Base Bareboat Rate will be adjusted by USD 45.00 per day up or down for each 10bps change in the Interest Rate Swap Rate; |
33.2.2 | To the extent that the Fair Market Value falls below USD 35,000,000, the Base Bareboat Rate shall be reduced by the Committed Capital Reduction Factor; |
33.2.3 | The Base Bareboat Rate adjustment shall not result in the Base Bareboat Rate being greater than USD 8,800 per day except in the case of an upward LIBOR adjustment. |
34. | TRADING LIMITS |
34.1 | The Vessel shall be employed within British Institute warranty limits (IWL), excluding United |
34.2 | Should the Charterers wish to call at a port in the excluded countries/areas, as given aforesaid, the Owners and the Charterers shall discuss the conditions for each call which however, shall always be subject to Owners' final approval. Such approval not to be unreasonably withheld. |
34.3 | The Vessel shall not trade in any kind of ice or follow ice breakers. U.S. trading always to exclude Alaska. |
34.4 | The Charterers to have the option to trade into a war or warlike zone provided insurance coverage is obtainable for such entry and always subject to Owners' approval which not to be unreasonably withheld. Costs for such additional insurance coverage including but not limited to those attributable to closure (i.e. blocking and trapping), loss of hire and crew war bonus to be for Charterers account. |
35. | OWNERS' RIGHT TO SELL THE VESSEL |
35.1 | That such sale of the Vessel shall by no means affect the continuation of this Charter and the new owner shall comply in full with all terms and conditions of this Charter, and the new owner will be included in/bound by a customary novation agreement. |
35.2 | Any new owner always to be approved by Charterers, such approval not to be unreasonably withheld. |
36. | CHARTERERS' COVENANTS AND UNDERTAKINGS |
36.1 | The Charterers will for the duration of the Charter Period and, if longer, until such period as the Vessel is redelivered to the Owners in accordance with this Charter: |
36.1.1 | comply, with all applicable Environmental Laws in regard of the Vessel and will maintain in force and promptly obtain or renew all Environmental Approvals required to operate its business as from time to time conducted or reasonably anticipated to be conducted; |
36.1.2 | notify the Owners and the Owners' Bank forthwith by telefax or e-mail upon: |
36.1.2.1 | any Environmental Claim being made against it and/or any operator or the Approved Managers for the time being of the Vessel or otherwise in connection with the Vessel; and |
36.1.2.2 | any Environmental Incident occurring; |
36.1.3 | keep the Owners and any Mortgagee advised in writing on such regular basis and in such detail(s) as the Owners or any Mortgagee shall require, of its response to any Environmental Claim made in connection with the Vessel or any Environmental Incident: |
36.1.4 | indemnify the Owners and any Mortgagee against any loss and/or costs and/or Taxes of whatsoever nature it might incur deriving from an Environmental Claim or an Environmental Incident. |
36.2 | The Charterers undertake to the Owners that they will throughout the Charter Period and, if longer, |
36.2.1 | exercise due diligence to maintain the Vessel, its coatings, machinery and equipment in the condition specified in Appendix "A" and if and whenever the Vessel is not in such condition, exercise due diligence to put the Vessel in to such condition as soon as reasonably practicable. This Clause 36.2.1 shall be without prejudice to Charterers' absolute obligations in relation to the Vessel's return condition at redelivery; |
36.2.2 | keep the Vessel, and cause the Vessel to be kept, insured in accordance with the requirements of this Charter and at all times comply with all terms and conditions of such Insurances; |
36.2.3 | promptly inform the Owners of any damage to or alteration of the Vessel exceeding the value of United States Dollars five hundred thousand (USD 500,000); |
36.2.4 | not cause or permit any ship under its control or ownership (including the Vessel) to proceed to, or remain at, any location to the extent prohibited by or subject to Sanctions; |
36.2.5 | not and do not hold a contract or any other obligation, to operate a ship (including the Vessel) contrary to any of the Sanctions; and |
36.2.6 | not (i) use or permit the use of a ship (including the Vessel) owned or controlled by it, for or on behalf of any person to transport Iranian oil or petroleum products refined in Iran, (ii) finance such trading and (iii) perform services, including financing services, or supply goods or technology that would benefit the Iranian oil industry. |
36.3 | The Charterers undertake throughout the Charter Period and until the Vessel is redelivered to Owners, if later, to comply, or to procure that the Approved Managers of the Vessel complies, with the ISM Code and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISM Code and at all times thereafter: |
36.3.1 | to hold, or to procure that the Approved Managers of the Vessel holds, a valid Document of Compliance (being a document issued to a vessel operator as evidence of its compliance with the requirements of the ISM Code) duly issued to the Charterers or the Approved Managers (as the case may be) pursuant to the ISM Code and a valid Safety Management Certificate (being a document issued to a vessel as evidence that the Approved Managers and its shipboard management operate in accordance with an approved structured and documented system enabling the personnel of the Vessel's operator to implement effectively the safety and environmental protection policy of that vessel operator) duly issued to the Vessel pursuant to the ISM Code, |
36.3.2 | to provide the Owners with copies of any such Document of Compliance and Safety Management Certificate as soon as the same are issued and after every renewal; and |
36.3.3 | to keep or to procure that there is kept, on board the Vessel a copy of any such Document of Compliance and the original of any such Safety Management Certificate. |
36.4 | The Charterers will comply with all applicable licenses, permits, and franchises issued or granted by any government authority in regard of the Vessel and this Charter and will maintain in force and promptly obtain or renew all such licenses, permits, and franchises required to operate its business as from time to time conducted or reasonably anticipated to be conducted; |
36.5 | The Charterers shall deliver to the Owners: |
36.5.1 | forthwith copies of any charter contract concluded for the Vessel and any and all amendments, supplements, side letters and additional agreements whatsoever in relation thereto; |
36.5.2 | upon the Owners' request, class certificates for hull and machinery and the Owners and any Mortgagee shall be permitted access to all reports of the Classification Society; |
36.5.3 | upon the Owners' request, information as to the employment and operation of the Vessel, Charterers' and each Charter Guarantor's financial status and prospects, details of trade debtors and trade payables and ageing and the Vessel's trading results on an open book basis. |
36.6 | The Charterers will maintain in force and promptly required to maintain the Security Interests created by the Transaction Documents and/or any additional Security Interests as the Owners or the Owners Bank may reasonably request; |
36.7 | The Charterers shall permit the Owners, at the Charterers' expense, to arrange for the Vessel to be fully surveyed once per year (for which purpose Charterers shall fully cooperate with all reasonable requirements of Owners for carrying out such survey) and the Charterers shall submit the Vessel to all periodical or other surveys which may be required for classification purposes at the Charterers' expense and shall provide the Owners with copies of all survey reports; |
36.8 | The Charterers shall permit the Owners (by surveyors or other persons appointed by them for that purpose) to board the Vessel at any time to inspect its condition or to satisfy themselves about proposed or executed repairs and/or to review the Vessel's operating and/or insurance records without interfering with the Vessel's operation and shall afford all proper facilities for such inspections and, to the extent that such inspections are additional to those surveys referred to in Clause 36.7 above, such inspections shall be at the cost of the Owners unless Charterers are found to be in breach of their maintenance obligations under this Agreement, in which event the relevant survey shall be for Charterers' account. |
36.9 | The Charterers undertake to the Owners that throughout the Charter Period and until the Vessel is redelivered in accordance with this Charter, if longer, the Charterers will not without the prior written consent of the Owners: |
36.9.1 | make any loans or advances to or any investments in any person (including, without limitation, any loan or advance to any officer, director, stockholder, employee or customer of the Charterers) unless necessary for the operation of the Vessel and provided the same are subject and subordinate in regard of their payment and their enforcement to any and all the Owners' rights under or pursuant to this Charter and the Transaction Documents; |
36.9.2 | assume, guarantee or endorse or otherwise provide security or become or remain liable in connection with any obligation of any person unless reasonably necessary for the Vessel's undisturbed operation; |
36.9.3 | authorize, accept or incur any capital commitments other than under the Transaction Documents; |
36.9.4 | make any alterations to the Vessel (Owners' consent not to be unreasonably withheld although it is understood that it shall always be reasonable to withhold consent where alterations would, in the opinion of Owners, limit the Vessel's marketability or diminish its value); |
36.9.5 | create, incur or allow to exist over the Vessel any security interests other than Security Interests created under the Transaction Documents; |
36.9.6 | part with physical control or possession of the Vessel; |
36.9.7 | permit any change of flag, management or dual-flagging of the Vessel; |
36.9.8 | bareboat charter out the Vessel to any third party; |
36.9.9 | appoint any technical or commercial managers unless it is an Approved Manager; |
36.9.10 | consolidate with or merge into any other corporation or merge any other corporation into the Charterers; |
36.9.11 | amend, vary, novate, supplement, supersede, waive or terminate any term of, any of the Transaction Documents or any other document delivered to the Owners and/or the Owners' Bank pursuant to Clause 61 |
36.10 | The Charterers undertake to the Owners to enter into any agreements, deeds, undertakings and other documents as the Owners may require in connection with any Senior Loan Agreement, or proposed Senior Loan Agreement, including, without limitation, entering in to such direct operating and insurance covenants in relation to the Vessel and security assignments as may be required by the Owners' Bank in relation to such Senior Loan Agreement and to procure that each Charter Guarantor shall acknowledge in such terms as the Owners may require notices of any security assignment entered into pursuant to any Senior Loan Agreement granting Security Interests over the Charter, the Charter Guarantee and/or the Share Pledge. |
36.11 | If (a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Charter; (b) any change in the status of the Charterers and/or the Guarantor after the date of this Charter; or (c) a proposed assignment or transfer by the Owners or the Owners' Bank of any of its rights and obligations under the Transaction Documents to a third party, obliges the Owners and/or the Guarantor (or, in the case of (c), any third party) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Charterers shall promptly upon the request of the Owners or the Owners' Bank supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Owners or the Owners' Bank (for itself or, in the case of the event described in (c), on behalf of any third party) in order for the Owners and/or the Owners' Bank or, in the case of the event described in (c), any third party to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Transaction Documents including without limitation obtaining, verifying and recording certain information and documentation that will allow the Owners and/or the Owners' Bank to identify the Charterers and/or the Guarantor in accordance with the requirements to the Patriot Act. |
36.12 | The Charterers shall promptly upon the request of the Owners and/or the Owners' Bank supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Owners and/or the Owners' Bank in order for the Owners and/or the Owners' Bank to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Transaction Documents. |
36.13 | The Charterers shall promptly (a) obtain, comply with and do all that is necessary to maintain in full |
36.13.1 | enable the Charterers and the Guarantor to perform its obligations under the Transaction Documents to which they are respectively a party; |
36.13.2 | ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document; and |
36.13.3 | enable the Charterers and/or the Guarantor to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect. |
36.14 | The Charterers shall ensure that at all times this Charter and the Transaction Documents constitute the valid and legally binding and enforceable obligations of the Charterers ranking at least pari passu with all other of their unsecured obligations and liabilities (actual or contingent) other than any mandatorily preferred by law and any Security Interests intended to be created thereby rank with their intended priority over the claims of other creditors; |
36.15 | The Charterers shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Owners and/or the Owners' Bank may reasonably specify (and in such form as the Owners and/or the Owners' Bank may reasonably require in favour of the Owners, the Owners' Bank and/or their nominee(s)): |
36.15 1 | to perfect any Encumbrance created or intended to be created under or evidenced by the Transaction Documents or the Senior Loan Agreement (which may include the execution of a mortgage, charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Transaction Documents or the Senior Loan Agreement) or for the exercise of any rights, powers and remedies of the Owners and/or the Owners' Bank provided by or pursuant to the Transaction Documents, the Senior Loan Agreement, or by law; |
36.15.2 | to confer on the Owners and/or the Owners' Bank an Encumbrance over any property and assets of that Charterers and/or the Guarantor located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Transaction Documents or the Senior Loan Agreement; and/or |
36.15.3 | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Documents. |
36.16 | The Charterers shall take all such action as is available to and requested of them (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Owners or the Owners' Bank by or pursuant to the Transaction Documents or the Senior Loan Agreement. |
37. | INSURANCES |
37.1 | With reference to Box 29 of this Charter, Charterers to insure that at all times the Vessel is properly and adequately insured with underwriters acceptable to the Owners and the Owners' Bank with such limits and such deductibles as the Owners and the Owners' Bank shall approve, naming the Owners' Bank as loss payee for any event of loss, together with an insurance broker undertaking to provide Owners' Bank with 14 days prior written notice of cancellation: |
37.1.1 | Protection and Indemnity cover, |
37.1.2 | Hull and Machinery Insurance, |
37.1.3 | War Risks Insurance, and |
37.1.4 | Other insurance required by the Owners, including but not limited to, Mortgagees Interest Insurance (MI1) and Mortgagee's Interest Additional Perils (MIAP) to be placed at the request of the Owners at the Charterers expense. |
37.2 | The Charterers shall assign to the Owners all the Charterers' interests in the Insurances. Proceeds from Insurances for amounts less that USD 500,000 to be paid directly to the Charterers unless there is Total Loss or an Event of Default. In the event of a major casualty, no insurance proceeds in excess of USD 500,000 shall be paid to the Charterers or to the shipyard repair facility and associated repair suppliers by the insurers, unless with the prior written consent of the Owners which shall not be unreasonably withheld or delayed. The Charterers shall provide documentary evidence to the owners that the proceeds are used to discharge all repair related liabilities. In the event of Total Loss all insurance proceeds shall be received in full by the Owners (or their mortgagee as assignee) and applied by the Owners as follows: |
37.2.1 | First towards the Owners' or/and their mortgagees' costs incidental to the Total Loss; |
37.2.2 | Second towards any amounts due and payable by the Charterers to the Owners under the Charter; |
37.2.3 | Third towards any amount equal to the Call Option Base Price or if in between any two anniversaries of the Delivery Date the amount payable will be calculated by linear interpolation between the preceding and succeeding Call Option Base Price. |
37.2.4 | Fourth, any balance to be paid to the Charterers. |
37.3 | The Charterers (without prejudice to the terms of the assignments of insurances referred to in the Charterers' Assignment of the Insurances) shall procure that the interest of the Owners and the Owners' Bank shall be duly endorsed upon all slips, cover notes, policies, certificates of entry or other instruments of insurance issued or to be issued in connection with the Insurances aforesaid and to procure that the said slips, cover notes, policies, certificates of entry or other instruments of insurance issued or to be issued shall provide for fourteen (14) days prior written notice to be given to the Owners and the Owners' Bank by the brokers in the event of cancellation of insurance; |
37.4 | The Charterers shall inform the Owners promptly of any person named in the Insurances as an assured and cause each additional assured to execute and deliver to the Owners assignments of the Vessel's Insurances and notices of assignment substantially in the form of the relevant Charterers' Assignment and cause each such additional assured to execute and deliver to the Owners and the Owners' Bank its agreement in writing that the provisions of Clause 37.3 shall apply mutatis mutandis between the Owners and the Owners' Bank on the one side and the additional assured on the other side. |
38. | TIME CHARTER PARTIES |
38.1 | The Charterers shall procure that Stena Weco shall pay the hire payable under the Stena Weco Time Charter as from the Delivery Date to the Earnings Account. The Charterers shall deliver to the Owners a copy of the notice requiring Stena Weco to pay such hire to the Earnings Account. |
38.2 | The Charterers undertake to the Owners that they will throughout the Charter Period and, if longer, until such time as the Vessel is redelivered to Owners in accordance with the provisions of this Charter maintain an average minimum firm Time Charter cover across both Stena Vessels of six months at all times, such average calculated every time any one of the Stena Vessels is delivered under a new Time Charter as (A) the sum of (i) the firm term of such Time Charter plus (ii) the firm term of the Time Charter then in effect for the other vessel (B) divided by two.. |
38.3 | The Charterers shall not enter into any employment contract in connection with the Vessel other than a Time Charter unless it shall be acceptable to the Owners' Bank. |
38.4 | Concurrent with its entry into a Time Charter, the Charterers shall assign the Time Charter to the Owners and either the Owners or the Charterers shall deliver to the Time Charterer a notice of the assignment to the Owners of the Time Charter and shall receive from such Time Charterer an acknowledgement of such assignment, and shall also request the Time Charterer to deposit all payments due under such Time Charter into the Earnings Account. |
39. | FINANCIAL STATEMENTS AND REPORTING |
39.1 | The Charterers shall deliver to the Owners - |
39.1.1 | annual US GAAP audited English language financial statements, certified by a major internationally recognised accounting firm, of both the Charterers and the Guarantor within 120 days of the fiscal year end; |
39.1.2 | quarterly US GAAP unaudited English language financial statements and business update of both the Charterers and the Guarantor within 90 days of the end of each quarter year period; |
39.1.3 | annual financial projections of the Guarantor within 60 days of the end of the fiscal year; and |
39.1.4 | any such other information reasonably requested by the Owners. |
39.2 | The Charterers shall notify the Owners and the Owners' Bank without delay when there is any event, development, litigation, investigation or circumstance that has had or could reasonably be expected to have a Material Adverse Effect on the business, assets (including vessel operations and performance), liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Vessel, the Guarantor, the Charterer, or Stena Weco, as well as their respective members, affiliates and subsidiaries, taken as a whole; |
39.3 | The Charterers shall promptly inform the Owners of any occurrence of which it becomes aware which may adversely affect its ability to perform the Charterers' obligations hereunder or under any Transaction Document or constitute an Event of Default, including but not being limited to any default under the Stena Weco Time Charter. |
39.4 | The Charterers shall deliver to the Owners and/or the Owners' Bank promptly, such information as the Owners and/or the Owners' Bank may reasonably require about the Vessel and compliance of the Charterers and the Guarantor with the terms of any Transaction Documents including without limitation cash flow analyses and details of the operating costs of the Vessel. |
39.5 | The Charterers shall deliver to the Owners and/or the Owners' Bank promptly on request, such further information regarding the financial condition, assets and operations of the Charterers and/or the Guarantor (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by the Charterers and/or the Guarantor under this Charter and an up to date copy of its shareholders' register (or equivalent in its jurisdiction)) as the |
39.6 | Promptly upon a request by the Owners and/or the Owners' Bank, the Charterers shall supply to the Owners and/or the Owners' Bank a certificate signed by two of its directors or senior officers on its behalf certifying that no Event of Default is continuing (or if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it). |
40. | CHARTERERS' UNDERTAKINGS IN RESPECT OF EARNINGS AND EARNINGS ACCOUNT |
40.1 | The Charterers shall ensure that, throughout the Charter Period, all of the Earnings are paid to the Earnings Account or, following the occurrence of an Event of Default or any event which, with the service of notice or passage of time may become an Event of Default, to such account as the Owners shall by notice require. |
40.2 | The Charterers shall comply with any requirement of the Owners as to the location or relocation of the Earnings Account and execute any documents which the Owners specify to create or maintain a Security Interest over the Earnings Account. |
40.3 | Provided no Event of Default has occurred and is continuing, all Earnings received shall be applied as follows: |
40.3.1 | First: payment of hire as provided in Clause 11 of this Charter; |
40.3.2 | Second: towards funding the Special Survey Reserve as provided in clause 41.1; |
40.3.3 | Third: any balance shall be released to the Charterers. |
40.4 | If there exists an Event of Default and as long as such Event of Default is continuing, any balance referred to in Clause 40.3.3 shall be applied as follows: |
40.4.1 | First: payment of all fees and costs incurred by the Owners under and in connection with the Event of Default; |
40.4.2 | Second: payment of default interest due and payable under this Charter; |
40.4.3 | Third: payment of hire as provided in Clause 11 of this Charter; |
40.4.4 | Fourth: towards funding the Special Survey Reserve as provided in Clause 41.1; |
40.4.5 | Fifth: any balance, unless this Charter has been terminated, shall be released to the Charterers. |
41. | SPECIAL SURVEY RESERVE |
41.1 | As of the third anniversary of the Delivery Date, the Charterers shall start paying a monthly instalment of USD 16,666.67 to the Earnings Account towards future costs of drydock and special class surveys. |
41.2 | The Owners shall release - |
41.2.1 | an amount not exceeding the actual documented cost of such drydock and special class survey to the Charterers, provided no Event of Default has occurred or is continuing, upon receipt by the Owners of reasonably acceptable documentation of the cost to complete or evidence of the completion of any such drydock or special class survey; |
41.2.2 | the Special Survey Reserve and any interest accrued thereon to the Charterers in the event that Charterers exercise a Call Option under clause 3 of the Call Option Agreement. |
42. | SECURITY |
42.1 | As security for their due and punctual performance under this Charter, the Charterers hereby agree that: |
42.1.1 | they will: |
(i) | assign to the Owners (a) all of their rights, title and interests in and to all policies and contracts of insurance (which expression includes all entries of the Vessel in protection and indemnity or war risks associations) which are from time to time taken out or entered into by the Charterers in respect of the Vessel pursuant to this Charter and (where the context permits) all benefits thereof, including all claims of any nature and returns of premium and (b) all monies whatsoever which are now, or later become, payable to the Charterers and which arise out of the use or operation of the Vessel, including (but not limited to) except to the extent that they fall within paragraph (ii), any earnings from any charter, all freight, hire and passage monies in substantially the same form as Appendix "B"; |
(ii) | assign to the Owners the Stena Weco Time Charter and deliver an acknowledgement of the assignment by the Time Charterer to the Owners all of which shall be in substantially the same form as Appendix "C" and |
42.1.2 | they will procure the issue by the Guarantor of a guarantee in favour of the Owners, guaranteeing the due and faithful performance by the Charterers of all their obligations under this Charter and any other agreements made between the Owners and the Charterers which shall be in substantially the same form as Appendix "D"; |
42.1.3 | they will procure the grant by the Charterers' shareholders of a share pledge on terms substantially the same as Appendix "E"; and |
42.1.4 | they will enter into any other agreements, execute any other documents and procure any securities in such form as the Owners may reasonably request to secure the Charterers' obligations under this Charter. |
43. | REPRESENTATIONS AND WARRANTIES |
43.1 | The Charterers acknowledge that the Owners have entered into this Charter in full reliance on representations by the Charterers in the following terms; and the Charterers now warrant to the Owners that the following statements are, at the date hereof, and on the Delivery Date will be, true and accurate:- |
43.1.1 | The Charterers are duly established and validly existing under the laws of the Republic of the Marshall Islands; |
43.1.2 | The Charterers have the power to conduct their business as it is now carried on, to own or hold under lease their assets, to execute, deliver and perform their obligations under this Charter, and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of this Charter; |
43.1.3 | This Charter and the Transaction Documents constitute the valid and legally binding and enforceable obligations of the Charterers ranking at least pari passu with all other of their unsecured obligations and liabilities (actual or contingent) other than any mandatorily preferred by law and any Security Interests intended to be created thereby rank with their intended priority over the claims of other creditors; |
43.1.4 | The entry into and performance by the Charterers of this Charter or any other Transaction Document to which it is a party does not, and will not during the Charter Period, violate (i) any existing law or regulation of any governmental or official authority or body to which the Charterers or their business operations are subject, or (ii) the constitutional documents of the Charterers, or (iii) any agreement, contract or other undertaking to which the Charterers are a party or which is binding on the Charterers or any of their assets; |
43.1.5 | All consents, licences, approvals and authorisations required in connection with the entry into, performance, validity and enforceability of this Charter have been obtained and are, or will on and following the Delivery Date be, in full force and effect; |
43.1.6 | No litigation, arbitration or administrative proceeding is taking place against the Charterers or against any of their assets which is likely to be adversely determined and, if adversely determined, would have a Material Adverse Effect on the Charterers' ability to perform their obligations under this Charter and to the best of the Charterers' knowledge and belief no such actions, suits or proceedings have been threatened; |
43.1.7 | No Environmental Claim is being asserted against the Charterers and to the best of the Charterers' knowledge and belief no such Environmental Claim has been threatened; |
43.1.8 | The representations and warranties contained in each Charter Guarantee are, at the date thereof, and on the Delivery Date will be, true, accurate and complied with. |
43.1.9 | No corporate action, legal proceeding or other procedure or step described in Clause 44.1.8 or creditors' process described in Clause 44.1.14 has been taken or, to the knowledge of the Charterers, threatened in relation to the Charterers or the Guarantor; and none of the circumstances described in Clause 44.1.3 applies to the Charterers and the Guarantor. |
43.1.10 | No Event of Default and, on the date of this Charter, no Event of Default is continuing or is reasonably likely to result from the entry into, the performance of, or any transaction contemplated by, any of the Transaction Documents. |
43.1.11 | Save as disclosed in writing to the Owners, prior to the date of this Charter and to the knowledge of the Charterers: |
43.1.11.1 | any factual information provided by or on behalf of the Charterers and/or the Guarantor to the Owners was true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given; |
43.1.11.2 | any financial projection or forecast provided by or on behalf of the Charterers and/or the Guarantor to the Owners has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report or document containing the projection or forecast) and arrived at after careful consideration; |
43.1.11.3 | no event or circumstance has occurred or arisen and no information has been omitted and no information has been given or withheld that results in the information, |
43.1.11.4 | all material information provided to the Owners by or on behalf of any of the Charterers and/or the Guarantor on or before the date of this Charter and not superseded before that date is accurate and not misleading in any material respect and all projections provided to the Owners on or before the date of this Charter have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and |
43.1.11.5 | all other written information provided by any of the Charterers and/or the Guarantor (including its advisers) to the Owners was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect. |
43.1.12 | To the knowledge of the Charterers each of the Charterers' and the Guarantor's most recent financial statements delivered pursuant to Clause 39.1 give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate. |
43.1.13 | To the knowledge of the Charterers since the date of the most recent financial statements delivered pursuant to Clause 39.1 there has been no material adverse change in the business, assets or financial condition of any of the Charterers or the Guarantor. |
43.1.14 | To the knowledge of the Charterers none of the Charterers or the Guarantor has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect. Neither the Charterers nor the Guarantor is in violation of and none shall violate any of the country or list based economic and trade sanctions administered and enforced by OFAC, the European Union or the United Nations that are described or referenced at http://ustreas.gov/offices/enforcement/ofac or as otherwise published from time to time. |
43.1.15 | Each of the Charterers and the Guarantor is in compliance with Clause 36.1.1 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. |
43.1.16 | To the knowledge of the Charterers each of the Charterers and the Guarantor has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws. |
43.1.17 | The Charterers are not aware of any material facts or circumstances which have not been disclosed to the Owners and which might, if disclosed, have adversely affected the decision of a person considering whether or not to enter into any of the Transaction Documents. |
43.2 | Each Representation is deemed to be repeated by the Charterers by reference to the facts and circumstances then existing on the day of each charter hire payment. |
44. | DEFAULT CLAUSE |
44.1 | Any of the following events shall be an "Event of Default" for the purposes of this Charter: |
44.1.1 | if the Charterers and/or the Guarantor fail to pay when due any charter hire or any other sum |
44.1.2 | the Charterers and/or the Guarantor fails to fund the Special Survey Reserve; |
44.1.3 | the Stena Weco Time Charter or any other Time Charter is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date, provided that, in the event such occurrence is caused by a default of Stena Weco or any other Time Charterer, or by its actions or its failure to act, the Charterers shall have 30 days to replace it with a Time Charter in form and substance satisfactory to the Owners acting reasonably and in compliance with Clause 38.2; |
44.1.4 | the Charterers changes an Approved Manager without the prior written consent of the Owners, or fails to replace an Approved Manager within 30 Banking Days if requested by the Owners; |
44.1.5 | the Charterers changes the Vessel's class or flag without the prior written consent of the Owner; |
44.1.6 | the Charterers or the Guarantor are unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts, or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness; |
44.1.7 | a moratorium is declared in respect of any indebtedness of the Charterers or the Guarantor; if a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium; |
44.1.8 | any corporate action, legal proceedings or other procedure or step is taken for: |
44.1.8.1 | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) the Charterers or the Guarantor; |
44.1.8.2 | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of the Charterers or the Guarantor or any of their assets. |
44.1.9 | the Charterers fail to maintain any insurances as required under this Charter; |
44.1.10 | an Event of Default occurs under the Bareboat Charter II; |
44 1 11 | Any Financial Indebtedness of the Charterers or of the Guarantor or any of their respective Subsidiaries which are consolidated for accounting purposes: |
44.1.11.1 | is not paid when due nor within any originally applicable grace period; or |
44.1.11.2 | is declared to be, or otherwise becomes, due and payable prior to its specified |
44.1.11.3 | is capable of being declared by a creditor to be due and payable prior to its specified maturity as a result of such an event; or |
44.1.11.4 | is restructured in a manner that results, in aggregate, in a more favourable position for the affected lender. |
44.1.12 | if there is any event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect on the business, assets (including vessel operations and performance), liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Vessel, the Guarantor and the Charterer as well as their respective members, affiliates and subsidiaries, taken as a whole; |
44.1.13 | any representation or statement made or deemed to be repeated by the Charterers and/or the Guarantor in any Transaction Document or any other document delivered by or on behalf of Charterers and/or the Guarantor under or in connection with any Transaction Document is or proves to have been incorrect or misleading when made or deemed to be made; |
44.1.14 | the Vessel is arrested or detained and such Vessel is not released from such arrest or detention within 30 days from the date of its arrest or detention; |
44.1.15 | it is or becomes unlawful for the Charterers and/or the Guarantor to perform any of its material obligations under the Transaction Documents or any Encumbrance created or expressed to be created or evidenced by the Transaction Documents ceases to be effective; |
44.1.16 | any material obligation or obligations of the Charterers and/or the Guarantor under any Transaction Document are not or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Owners and/or the Owners' Bank under the Transaction Documents; |
44.1.17 | any Transaction Document ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Transaction Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than the Owners and/or the Owners' Bank) to be ineffective: |
44.1.18 | any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration of any governmental, judicial or other public body or authority which is now, or which at any time during the Charter Period or before the Vessel is redelivered becomes, necessary to enable any of the Charterers or the Guarantor or any other person (except the Owners and/or the Owners' Bank) to comply with any of their obligations under any Transaction Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Owners considers is, or may be, prejudicial to the interests of the Owners and/or the Owners' Bank, or ceases to remain in full force and effect or the classification society for the Vessel withdraws the classification certificate for the Vessel; |
44.1.19 | any one of the Stena Vessels suffers a Total Loss or is otherwise destroyed or abandoned, or a similar event occurs in relation to any other vessel which may from time to time be mortgaged to the Owners' Bank as security for the payment of all or any part of the Owners' indebtedness under the Senior Loan Agreement, except that a Total Loss (which term shall for |
44.1.19.1 | that Vessel or other vessel is insured in accordance with the Senior Loan Agreement and the Transaction Documents and a claim for Total Loss is available under the terms of the relevant insurances; and |
44.1.19.2 | no insurer has refused to meet the claim for Total Loss and it is not apparent to the Owners and the Owners' Bank in its reasonable discretion that any such refusal or dispute is likely to occur; and |
44.1.19.3 | payment of all insurance proceeds in respect of the Total Loss is made in full to the Owners' Bank within 120 days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Owners' Bank may in its discretion agree; |
44.1.20 | the country of registration of the Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Owners and/or the Owners' Bank in their discretion considers that, as a result, the security conferred by any of the Transaction Documents is materially prejudiced; |
44.1.21 | any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Transaction Documents or the transactions contemplated in the Transaction Documents or against the Charterers and/or the Guarantor or their assets which have or are reasonably likely to have a Material Adverse Effect; |
44.1.22 | any of the Charterers or the Guarantor, or an Affiliate of any of them becomes a Prohibited Person or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Prohibited Person or any of such persons becomes the owner or controller of a Prohibited Person; |
44.1.23 | any of the Charterers and/or the Guarantor, or any Affiliate of any of them is not in compliance with all Sanctions; |
44.1.24 | the Guarantor's Consolidated Leverage Ratio exceeds 75%; |
44.1.25 | the Guarantor does not maintain a minimum unrestricted liquidity at all times of (i) USD 750,000 per vessel owned (directly or through wholly-owned subsidiaries) by it and (ii) USD 500,000 per vessel bareboated in by the Guarantor or a wholly-owned subsidiary, in both cases measured and certified quarterly; |
44.1.26 | the Guarantor defaults under any other financial covenant that may be contained in any future material financing agreement (whether by senior or junior loans, notes or bareboat charters) entered into by the Guarantor or any other subsidiary thereof; |
44.1.27 | without prejudice to the foregoing, the Charterers or the Guarantor defaults on any of its material other obligations under this Charter. |
44.2 | Notwithstanding Clause 44.1, the Charterers shall have 30 days from the occurrence of any event described in Clauses 44.1.13, 44.1.15, 44.1.18, 44.1.21, 44.1.24, 44.1.25, and 44.1.26 to cure and/or remedy such event and only if the event is continuing after 30 days from the day on which the event first occurred shall that even constitute an Event of Default. |
44.3 | An Event of Default shall constitute a breach under the Charter. At any time after an Event of Default has occurred and is continuing, the Owners may by notice (the " Default Notice " ) to the Charterers terminate this Charter and withdraw the Vessel either three days after the Default Notice having been given or at such later date as the Owners shall specify. Such right of termination shall be without prejudice to any claim the Owners may have against the Charterers. |
44.3.1 | Owners will submit to Charterers three independent valuations (desk top arms' length charter free basis) of the Vessel from Platou, Arrow and Fearnleys (or, in case any one or more of them no longer exist, any other internationally well reputed ship sale and purchase broker appointed by Owners), within 2 New York banking days of the date of the submission of the Default Notice. These three valuations will be used to evaluate the current fair market value (the " Sale Market Value " ) of the Vessel by using their simple arithmetic mean. |
44.3.2 | If the Sale Market Value is higher than the aggregate of (i) the Call Option Base Price (as referred to in Schedule 1 of the Call Option Agreement) (pro rata adjusted for in-between dates) calculated 60 days from the date the valuations were served to the Owners plus (ii) all amounts estimated by Owners for which Charterers are obliged to indemnify Owners under the Charter plus any break funding or swap termination costs estimated by Owners as well as any other costs and expenses estimated by Owners arising from the Event of Default and the termination of the Charter and the Vessel's sale for which Owners may be liable (the aggregate of (i) and (ii) above the "Aggregate Amount"), then Charterers can chose one of the three parties that provided the valuations to act as a sales agent. Owners shall then instruct the sales agent chosen by Charterers to find a buyer for the Vessel under the condition that, within 42 days from the date the Owners sent the Default Notice to Charterers, a sales contract is signed on NSF 2012 terms, under which the Vessel is sold at the highest market price and subject to such market price being greater than the Aggregate Sum, with a minimum deposit of 10% paid into a joint account, delivery is on "as is where is" basis without Owner's warranty (but Charterer's warranty, if appropriate and/or required) and the "cancelling date" (as per line 79 of the NSF 2012) being not later than 20 days from the date the MOA is entered into. It shall be understood that Owners shall use reasonable endeavours to the sell the Vessel but that the failure to sell the Vessel as described above, be it caused by the sales agent's failure or otherwise, shall not entitle the Charterers to any claims against Owners whatsoever, provided Owners have used reasonable endeavours to the sell the Vessel. |
44.3.3 | If the Sale Market Value is less than the Aggregate Amount, Owners shall have the rights under this Charter, including, but not being limited to, all hire accrued but unpaid under the Charter being paid to them and any other sums payable, but unpaid, under this Charter including all losses, expenses, fees and damages suffered by the Owners being paid to Owners. As soon as possible after the three independent valuations having been submitted to Owners, Owners shall provide Charterers with the final calculation of the amount due and payable to Owners under the Charter. Even after Owners having provided Charterers with the final calculation of the amount due and payable to Owners under the Charter, Owners shall have the right to claim losses, expenses, costs and fees incurred by Owners plus any amounts due to maritime liens on the Vessel incurred prior to the re-delivery of the Vessel to or its repossession by Owners. |
44.4 | Without prejudice to the foregoing provisions of this Clause 44, at any time after an Event of Default has occurred the Owners have the right to change the Approved Managers. |
45. | INSPECTION OF RECORDS |
46. | SHIP MANAGERS |
46.1 | The Charterers shall appoint S.A.M. Central Shipping Monaco of Monaco as technical and commercial managers of the Vessel, or any other third-party manager proposed by the Guarantor and reasonably acceptable to the Owners and the Owners' Bank, and, in all cases, to be employed under contract terms reasonably acceptable to the Owners' Bank and subject to the execution of the Managers' Undertakings. |
46.2 | S.A.M. Central Shipping Monaco shall be permitted to sub-contract certain management services to Central Mare Inc under contract terms reasonably acceptable to the Owners' Bank and subject to the execution of the Managers' Undertakings. |
46.3 | The Charterers undertake throughout the Charter Period and until the Vessel is redelivered to the Owners, if later, to comply, or to procure that the Approved Managers of the Vessel comply, with the ISM Code and in particular, without prejudice to the generality of the foregoing, as and when required to do so by the ISM Code and at all times thereafter: |
46.3.1 | to hold, or to procure that the technical Approved Managers of the Vessel hold, a valid Document of Compliance (being a document issued to a vessel operator as evidence of its compliance with the requirements of the ISM Code) duly issued to the Charterers or the technical Approved Managers (as the case may be) pursuant to the ISM Code and a valid Safety Management Certificate (being a document issued to a vessel as evidence that the vessel's technical Approved Managers and its shipboard management operate in accordance with an approved structured and documented system enabling the personnel of the vessel's operator to implement effectively the safety and environmental protection policy of that vessel operator) duly issued to the Vessel pursuant to the ISM Code, |
46.3.2 | to provide the Owners with copies of any such Document of Compliance and Safety Management Certificate as soon as the same are issued and after every renewal; and |
46.3.3 | to keep or to procure that there is kept, on board the Vessel a copy of any such Document of Compliance and the original of any such Safety Management Certificate. |
46.3.4 | In the event that the Approved Managers from time to time fail to fulfil the obligations in Clause 46.3 or the Owners are not satisfied with the quality of the management services provided by the Approved Managers from time to time, the Owners may notify the Charterers and the Charterers promptly shall replace the Approved Managers. |
47. | ADDITIONAL EQUIPMENT |
48. | CHARTERERS INDEMNITY |
48.1 | The Charterers shall on demand indemnify and keep indemnified the Owners (the "Indemnified Parties") against: |
48.1.1 | All costs, charges, expenses, fees, taxes (including, without limitation, all costs, charges, expenses, fees and/or taxes to be imposed on the Owners by the Marshall Islands Ship Registry or other governmental bodies in the Marshall Islands), losses, payments, liabilities, penalties, fines, damages or other sanctions of a monetary nature (collectively, "Losses") suffered or incurred by the Owners and arising directly or indirectly in any manner out of the design, manufacture, delivery, non delivery, purchase, importation, registration, incorporation, ownership, management, chartering, sub-chartering, possession, control, use, operation, condition, maintenance, repair, replacement, refurbishment, modification, overhaul, insurance, sale or other disposal, return or storage of or loss of or damage to the Vessel or otherwise in connection with the Vessel (whether or not in the control or possession of the Charterers) including any and all claims in tort or in contract by a sub-charterer of the Vessel or by the holders of any bills of lading issued by the Charterers or any sub-charterer; and |
48.1.2 | All Losses suffered or incurred by the Owners which result directly or indirectly from claims which may at any time be made on the ground that any design, article or material of or in the Vessel or the operation or use thereof constitutes or is alleged to constitute an infringement of patent or copyright or registered design or other intellectual property right or any other right whatsoever; and |
48.1.3 | All Losses suffered or incurred by the Owners in preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Vessel, or in securing the release of the Vessel therefrom; and |
48.1.4 | All Losses suffered or incurred by the Owners and/or the Owners' Bank with respect to or as a direct result of the presence, escape, seepage, spillage, leaking, discharge or migration from the Vessel of oil or any other hazardous substance, including without limitation, any claims asserted or arising under the US Oil Pollution Act of 1990 or the US Comprehensive Environmental Response Compensation and Liability Act of 1980 (as either may be or have been amended and/or re-enacted from time to time) or similar legislation in any other jurisdiction, regardless of whether or not caused by or within the control of the Charterers and regardless of whether or not caused as a consequence of any deficiencies in the technical condition of the Vessel on the Delivery Date; and |
48.1.5 | All Losses suffered or incurred by the Owners and/or its respective officers or members of the management board or shareholders or members and/or any Mortgagee and any other Lenders, as a consequence of any violation by the Charterers or any sub-charterer of U.S. law or any other laws pursuant to which the Vessel and/or her trading or operations shall be subject from time to time; |
48.2 | If, under any applicable law, whether as a result of judgment against the Charterers or the liquidation |
48.3 | The indemnities contained in this Clause 48 shall survive any termination or other ending of this Charter and any breach of, or repudiation or alleged repudiation by, the Charterers or the Owners of this Charter, but the indemnities contained in this Clause 48 shall not apply if and to the extent that the relevant cost, charge, expense or Losses arise solely as a result of any fraudulent or willful misconduct, recklessness or gross and culpable negligence of the Indemnified Party claiming such indemnity. All moneys payable by the Charterers under this Clause 48 shall be paid on demand. |
49. | CREW |
50. | TAXES / DUES ETC |
51. | PRIVACY |
52. | PRIOR CLAIMS |
53. | MOA AND DELIVERY |
53.1 | The Owners' obligations to charter the Vessel to the Charterers hereunder are conditional upon delivery of the Vessel to the Owners by the Charterers pursuant to the MOA free and clear of any lien or encumbrance. |
53.2 | Subject to the Vessel being delivered to, and taken over by, the Owners, pursuant to the MOA, the Charterers shall forthwith be deemed to have taken delivery of the Vessel under this Charter simultaneously with delivery by the Charterers pursuant to the MOA. |
53.3 | The Delivery Date for the purpose of this Charter shall be the date when the Vessel is in fact delivered by the Charterers to the Owners pursuant to the MOA, whether that be before or after the scheduled date under the MOA, and the Owners shall be under no responsibility for any delay whatsoever in delivery of the Vessel to the Charterers under this Charter. |
53.4 | Without prejudice to the provisions of Clause 53.2 above, the Owners and the Charterers shall on the Delivery Date sign a Protocol of Delivery and Acceptance evidencing delivery of the Vessel hereunder. |
54. | CANCELLING |
55. | TERMS OF DELIVERY |
55.1 | The Charterers acknowledge and agree that the Owners make no condition, term, representation or warranty. express or implied (and whether statutory or otherwise) as to seaworthiness, merchantability, condition, design, operation, performance, capacity or fitness for use of the Vessel or as to the eligibility of the Vessel for any particular trade or operation or any other condition, term, representation or warranty whatsoever, express or implied, with respect to the Vessel. The Charterers expressly agree to accept delivery of the Vessel whether or not the Vessel is seaworthy, in good working order and repair and whether or not subject to any defect or inherent vice, and the Charterers agree, at their own cost, to remedy any defects and inherent vices (even if not known or discoverable at the time of delivery) and to put the Vessel into seaworthy condition and good working order and repair the Vessel to the extent that this is not the case. The Charterers further acknowledge and agree that the Owners make no warranty regarding the Vessel being free and clear of any encumbrance, mortgage, charge, lien, Security Interest or debt of whatsoever nature (together " Liens " ) other than that it shall be free of any Liens created by the Owners with the exception of Security Interests created pursuant to any financing requirements of the Owners. |
55.2 | Without prejudice to the provisions of Clause 55.1, the Charterers hereby waive all their rights in respect of any condition, term, representation, or warranty express or implied (and whether statutory or otherwise) on the part of the Owners and all claims against the Owners howsoever the same may arise, and whether already existing or in the future arising, in respect of the Vessel arising out of the operation or performance of the Vessel and the chartering thereof under this Charter (including in respect of the seaworthiness or otherwise of the Vessel) and, in particular and without prejudice to the generality of the foregoing, the Owners shall be under no liability whatsoever and howsoever arising in respect of any losses, costs, charges, expenses, fees, payments, liabilities, penalties, fines, damages or other sanctions of a monetary nature in respect of the injury, death, loss, damage or delay of or to or in connection with any person (which expression includes, but is not limited to, states, governments, municipalities and local authorities) or property whatsoever, whether on board the Vessel or elsewhere, irrespective of whether or when or where such injury, death, loss, damage or delay shall arise or of whether it shall arise as a result of the Vessel not being seaworthy or otherwise or of whether or not the Vessel or any part thereof is in the possession or under the control of the Charterers provided always that nothing in this Clause 55 shall exclude any liability of the Owners for death or |
55.3 | The Charterers agree that the Owners shall be under no liability to supply any replacement vessel or any piece or part thereof during any period when the Vessel is unusable and shall not be liable to the Charterers or any other person as a result of the Vessel being unusable. |
55.4 | Nothing contained in this Clause 55 shall be construed as a waiver of any rights or remedies of the Charterers at law or in equity against the Owners in respect of (a) any fraudulent or willful misconduct of the Owners or (b) any failure on the part of the Owners to comply with any of the terms of this Charter. |
56. | CHARTER HIRE |
56.1 | All payments under this Charter shall be made without any set-off or counterclaim whatsoever and free and clear of and without withholding or deduction for, or an account of, any present or future income, freight, stamp and other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any nature (collectively "Taxes"). If the Charterers are so required to make any withholding or deduction from any such payment, the sum due from the Charterers in respect of such payment will be increased to the extent necessary to ensure that, after making such withholding or deduction, the Owners receive a net sum equal to the amount which it would have received had no such withholding or deduction been required to be made. The Charterers will promptly deliver to the Owners any receipts, certificates or other proof evidencing the amounts, if any, paid to payable in respect of any such withholding or deduction as aforesaid. |
56.2 | The Charterers' obligations to pay hire shall, subject to the terms of this Charter, be absolute, irrespective of any contingency whatsoever, including (but not limited to): |
56.2.1 | any set-off, counterclaim, recoupment, defence, deduction, withholding or other right which the Charterers may have against the Owners or any other person; |
56.2.2 | any unavailability of the Vessel for any reason, including (but not limited to) Total Loss or any lack or invalidity of title (save where due to an act or omission of Owners unrelated to deficiencies in the title to the Vessel acquired by the Owners from the Seller) or any other defect in the title, condition, design, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade or for documentation under the laws of any country or any damage to the Vessel; |
56.2.3 | any insolvency, bankruptcy, reorganisation, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against the Owners unless it affects the Vessel's normal trading or operation. |
57. | TERMINATION ON EXERCISE OF CALL OPTION |
58. | REDELIVERY |
58.1 | In the event that the Vessel is redelivered to the Owners under this Charter, Charterers shall |
58.2 | Prior to redelivery at the port of redelivery as indicated in Box 16 Charterers shall arrange a redelivery survey, including but not being limited to an underwater survey, to ascertain and report on the condition of the Vessel, all machinery, equipment and coatings and a full inventory of items on board in order to ascertain whether the Vessel conforms with the requirements of Appendix "A" regarding return condition. Charterers shall indemnify Owners for the cost of such survey. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel's condition as set out in Appendix "A", then |
58.2.1 | unless repairs can be carried out afloat to the satisfaction of the Owners upon consultation with the Classification Society, the charterers shall arrange for the Vessel to be drydocked at their expense for inspection by the Owners; |
58.2.2 | such defects shall be made good by the Charterers at their cost and expense to the satisfaction of the Owners upon consultation with the Classification Society, and |
58.2.3 | the Charterers shall pay for any attendance by the Vessel's classification society. |
58.3 | As from the end of the 81 st month of the Charter Period, the Owners shall be free to market the Vessel for sale during the remaining Charter Period and the Charterers shall at all reasonable times requested by the Owners facilitate inspection of the Vessel by potential buyers, subject to the requirements of the Vessel's trading schedule; |
59. | FEES AND EXPENSES |
59.1 | Charterers shall fully indemnify Owners in respect of all costs, fees and expenses (including but not limited to legal fees and expenses) reasonably incurred by Owners in connection with the negotiation, preparation and execution of the Charter and the Transaction Documents, the Senior Loan Agreement (save for the costs of Owners' Bank's lawyers), valuation expenses, inspection expenses, insurance reports, the registration of the Vessel under the laws and flag of the Marshall Islands, and the maintenance of such registration. In case of any waiver required under or amendment to the Senior Loan Agreement as a result of any act or omission by the Charterers, the Charterers shall fully indemnify Owners in respect of all costs, fees and expenses (including but not limited to legal fees and expenses) reasonably incurred by Owners in connection with such waiver and/or amendment. |
59.2 | The Charterers shall pay to the Owners the Upfront Fee and the Commitment Fee as provided in the Fee Letter. |
60. | COMMUNICATION |
60.1 | Except as otherwise provided for in this Charter, all notices or other communications under or in respect of this Charter to either party hereto shall be in writing and shall be made or given to such party at the postal address, e-mail address or facsimile number appearing below (or at such other postal address, e-mail address or facsimile number as such party may hereafter specify for such purposes to the other by notice in writing):- |
60.1.1 | In the case of the Owners: |
60.1.2 | In the case of the Charterers : |
60.2 | A written notice given by; |
60.2.1 | post shall be deemed given on the fifth day following posting by pre-paid first class post to the addressee; |
60.2.2 | facsimile shall be deemed given upon appropriate confirmation by the sender's equipment; and |
60.2.3 | e-mail shall be deemed given two hours after dispatch. |
60.2.4 | A notice received on a non-Banking Day or after business hours in the place of receipt shall be deemed to be served on the next following Banking Day in such place. |
60.3 | All communications and documents delivered pursuant to or otherwise relating to this Charter shall be in English. |
61. | CONDITIONS PRECEDENT, EFFECTIVENESS OF THIS CHARTER |
61.1 | Notwithstanding anything to the contrary in this Charter, the obligations of the Owners under this Charter shall be subject to receipt by the Owners on or prior to the Delivery Date of the following, each in form and substance acceptable to the Owners in its discretion: |
61.1.1 | the Guarantor's consolidated financial projections for the next seven years, presented on a quarterly basis for the first 12 months and on an annual basis thereafter; |
61.1.2 | the Approved Management Agreements; |
61.1.3 | the Stena Weco Time Charter; |
61.1.4 | a copy of the notice requiring Stena Weco to pay such hire to the Earnings Account. |
61.1.5 | evidence as the Owners may reasonably require that the Vessel will, as from the Delivery Date, be insured in accordance with the provisions of this Charter and that all requirements of this Charter in respect of such insurances have been complied with; |
61.1.6 | such corporate documents of the Charterers and the Guarantor as the Owners' legal advisers may require (including but not being limited to powers of attorney, shareholders' resolutions, legal opinions, officer solvency certificates etc.); |
61.1.7 | all documentation and other information required by bank regulatory authorities under applicable "Know Your Customers", anti-money laundering rules and regulations as well as compliance with all sanction laws, including without limitation OFAC; |
61.1.8 | such documentation and other evidence as is reasonably required by the Owners to comply with their internal "Know Your Customers" guidelines or other checks in relation to the identity of any person that they are required by any applicable law to carry out in connection with entering into the Transaction Documents; |
61.1.9 | each Transaction Document duly executed by the parties named therein; |
61.1.10 | all notices and other documents required to be signed under the Transaction Documents and acknowledgements of such notices duly signed by all addressees of such notices, and (if then available, failing which the same shall be a condition subsequent to be satisfied within fifteen (15) days of the Delivery Date), evidence that all insurance policies have been endorsed with notices of assignment and loss payable clauses in accordance with the terms of the Charterers' Assignments; |
61.1.11 | an insurance report to be obtained by the Owners from an independent insurance consultant and to be satisfactory to the Owners; |
61.1.12 | a class confirmation certificate in respect of the Vessel issued by DNV-GL evidencing that the Vessel is confirming that the Vessel is classed with the highest class applicable to vessels of her type with no overdue recommendations or requirements against class; |
61.1.13 | on the Delivery Date, a copy of the current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates of the Vessel; |
61.1.14 | such confirmations from the Owners' legal advisers in such jurisdictions as it considers relevant that legal opinions in form and substance acceptable to the Owners will be issued on or following the Delivery Date; |
61.1.15 | documents establishing that the Vessel will, as from the Delivery Date, be managed by the Approved Manager on terms acceptable to the Owners, together with (i) the Managers' Undertakings in the form attached as Appendix "G" executed by the Approved Managers in favour of the Owners and the Owners' Bank, and (ii) copies of the Approved Manager's Document of Compliance and of the Vessel's Safety Management Certificate and International Ship Security Certificate (together with any details of the applicable safety management system which the Owners require); |
61.1.16 | such evidence as the Owners may reasonably require that (i) performance and characteristics |
61.1.17 | the written confirmation of the Charterers and the Guarantor that there is no material dispute under any of the Transaction Documents as between the parties to any such document; |
61.1.18 | confirmation in writing by the Guarantor that (i) no default has occurred and is continuing with respect to any Financial Indebtedness of the Guarantor and (ii) the Guarantor has no knowledge of any commitment for Financial Indebtedness for itself being cancelled or suspended by a creditor thereof as a result of any default; |
61.1.19 | a copy of any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration or other document, opinion or assurance which the Owners' Bank considers to be necessary or desirable (if the Charterers and/or the Guarantor has been notified accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Documents or for the validity and enforceability of any Transaction Document; |
61.1.20 | confirmation from the Charterers that no default has occurred and is continuing in respect of the Stena Weco Time Charter; |
61.1.21 | evidence that the Vessel has been accepted by the charterer under the Stena Weco Time Charter; and |
61.2 | Notwithstanding anything to the contrary in this Charter and without prejudice to Clause 61.1, this Charter shall not become effective unless each and all of the following conditions precedent are fulfilled: |
61.2.1 | Execution of this Charter by all the parties thereto; |
61.2.2 | Execution of the MOA by the parties thereto; |
61.2.3 | Execution of the Call Option Agreement by the parties thereto; |
61.2.4 | Confirmation by the Owners' Bank that it is satisfied that performance and characteristics of the Vessel as proven during sea trials prior her Delivery are consistent with design and contract specifications; |
61.2.5 | The Vessel having been registered in the name of the Owners under the laws of the Approved Flag; |
61.2.6 | A First Priority Mortgage having been duly filed and recorded with the Approved Flag; |
61.2.7 | No Event of Default having occurred and continuing unremedied, and no other event having occurred and continuing which with the giving of notice and/or lapse of time would, if not remedied, constitute an Event of Default; |
61.2.8 | Each of the representations and warranties contained in Clause 43 of this Charter being true and correct in all material respects on the Delivery Date by reference to the facts and circumstances then existing; |
61.2.9 | The Owners having, through their agents, carried out a full delivery condition survey of the |
61.2.10 | the Owners' Bank being satisfied that there is no event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect on the transactions contemplated under the Transaction Documents, the Vessels or any other assets, liabilities, (actual or contingent), operations, condition (financial or otherwise) or prospects of the Guarantor, the Charterers, or Stena Weco. |
62. | MISCELLANEOUS |
62.1 | No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to it other than the Owners' Bank and their respective officers or members of the management board or shareholders or members. |
62.2 | In the event of any amendment or variation to this Charter, no consent shall be required from any third party expressing to have rights under this Charter. |
62.3 | If there is any conflict between the terms of the additional clauses and the printed part of this Charter, the terms of the additional clauses shall prevail. |
62.4 | This Charter and the other Transaction Documents constitute the whole agreement between the parties relating to the subject matter hereof and replace any prior correspondence, documents, agreements, discussions and/or representations in their entirety, save to the extent that additional documentation or information is required by the terms of Transaction Document to be provided by one party or its affiliate to the other party or its affiliate. |
CHARTERS
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EXECUTED
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/s/ Andreas Louka
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by
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Andreas Louka
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expressly authorised in accordance with
the laws of the Marshall Islands
by virtue of a power of attorney granted
by Monte Carlo One Shipping Company Limited
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OWNERS
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EXECUTED
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by
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John Hartigan As Attorney in Fact
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/s/ John Hartigan
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expressly authorised in accordance with
the laws of the Marshall Islands
by virtue of a power of attorney granted
by Monte Carlo One Shipping Company Limited
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RMI SPECIAL AGENT
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ACKNOWLEDGED
by ___________________________________
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Date
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2nd day of January, 2015
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Parties
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I.
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"
The Borrower
": Top Ships Inc., of the Republic of the Marshall Islands, Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, duly represented by Mr. Evangelos Ikonomou, Director/Chairman of the Board.
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II.
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"
The Lender
": Atlantis Ventures Co. of the Republic of the Marshall Islands, of Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MI 96960, duly represented by Mr. Geoffrey Peter Cone, Vice President/Secretary/Director.
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1. | Purpose of Loan |
1.1 | The Loan is to be used as bridge loan of the Borrower. |
2. | Repayment |
2.1 | The Borrower undertakes to repay the loan within twelve months from its drawdown in cash. |
3. | Mandatory Prepayment |
3.1 | In case of a successful equity offering the Borrower is obliged to repay the Loan fully in cash. |
3.2 | In case of change of Control of the Borrower, the Borrower is obliged to immediate prepay the loan as per clause 2 above. |
4. | Interest Rate - Default Interest |
4.1 | The rate of interest applicable to the Loan shall be eight per cent (8%) per annum on all amounts due and will start accruing six months from the date of the drawdown. |
4.2 | In the event of failure by the Borrower to settle the-Loan on the appointed date, the Borrower shall pay default interest on such amount on demand from the date of such default up to the date of actual payment (as well after as before judgment) at the rate of 2,5% over the applicable interest rate. Any interest not paid when due shall be compounded every three months. |
5. | Payments |
5.1 | All payments to be made by the Borrower shall be made at the free disposal of the Lender in freely transferable currency, by remitting funds to the account of the Lender or at such account as the Lender may have specified for such purpose. |
5.2 | All payments by the Borrower under this Agreement (whether in respect of principal, interest, or otherwise) shall be made in full, without any set-off, counterclaim or retention and free and clear of and without any deduction or withholding in respect of duties, taxes, charges, levies, impost duties or fees of any nature. |
5.3 | In the event that the Borrower or the Lender is required by law to make any such deduction or withholding from any payment then the Borrower shall forthwith pay to the Lender of the full amount which would have been received hereunder had no deduction or withholding been made. The obligations set forth in this Section shall survive the termination of this Agreement and the repayment of the Loan. |
6. | Representations and warranties of the Borrower |
6.1 | this Agreement constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. All consents, licenses, approvals, registrations, authorizations or declarations in the jurisdiction to which the Borrower is subject required to enable it to borrow hereunder and lawfully to enter into and perform and discharge its duties and liabilities under this Agreement have been obtained or made and are in full force and effect. |
6.2 | the signing and delivery of this Agreement and performance of any of the transactions contemplated in it will not contravene or constitute a default under any provision contained in any agreement, instrument, law, judgment, order, license, permit or consent by which the Borrower or any of its assets is bound or affected. |
6.3 | no condition, event or act has occurred and is continuing or would result from the making of the Loan which constitutes an Event of Default or a Default; |
6.4 | the Borrower is not in default under any agreement to which it is a party or by which it may be bound and no litigation, arbitration or administrative proceedings are presently current or pending, or to the knowledge of the Borrower, threatened, which in any such case would have an adverse effect upon the Borrower to perform and observe the obligations and provisions binding upon him, under this Agreement. |
7. | Default |
8. | Fees |
8.1 | The Borrower shall pay to the Lender an arrangement fee of USD 270,000 (two hundred seventy thousand US Dollars). Payment of the arrangement fee shall be made in cash on the date of the repayment of the Loan. The arrangement fee shall bear interest at the rate provided herein and such interest will start accruing six months from the date of the first drawdown under this agreement. |
8.2 | The Borrower shall grant to the Lender on the drawdown of the loan 120,000 shares of its common stock. Customary restrictions on trading, vesting and issuance of these shares reserved for this kind of transactions shall apply. |
8.3 | The Borrower shall pay all legal fees and expenses incurred in connection with the preparation, negotiation and conclusion of this Agreement. |
9. | Stamp Duties |
10. | No Waiver |
11. | Severance |
12. | Notices |
13. | As s ignment |
13.1 | Without prior written approval of the Lender (which the Lender may refuse at his absolute discretion) the Borrower shall not assign or transfer any rights and obligations under this Agreement. |
13.2 | The Lender may at any time at its discretion without the prior consent of the Borrower assign or transfer in whole or in part to a third party any rights, accessory rights and claims already existing or in future arising under this Agreement. |
14. | Confidentiality |
14.1 | Each of the parties hereto agree and undertake to keep confidential any documentation and any confidential information concerning the business, affairs, etc. which comes into its possession during this Agreement and not to use any such documentation, information for any purpose other than for which it was provided. |
14.2 | The Borrower acknowledges and accepts that the Lender may be required by law or that it may be appropriate for the Lender to disclose information and deliver documentation relating to the Borrower and the transactions and matters in relation to this Agreement to governmental or regulatory agencies and authorities. |
14.3 | The Borrower acknowledges and accepts that in case of occurrence of any of the Events of Default the Lender may disclose information and deliver documentation relating to the Borrower and the transactions and matters in relation to this Agreement to third parties (including in particular any technical advisors, accountants, any legal advisors) to the extend that this is necessary for the enforcement or the contemplation of enforcement of the Lender's rights or for any other purpose for which in the opinion of the Lender, such disclosure should be useful or appropriate for the interests of the Lender or otherwise and the Borrower expressly authorizes any such disclosure and delivery. |
14.4 | The Borrower acknowledges and accepts that the Lender may be prohibited or it may be inappropriate for the Lender to disclose information to the Borrower by reason of law or duties of confidentiality owed or to be owed to other persons. |
15. | Law and Jurisdiction |
15.1 | This Agreement shall be governed by and construed in accordance with English Law. |
15.2 | For the exclusive benefit of the Lender, the Borrower hereby irrevocably submits to the non-exclusive jurisdiction of the High Court of Justice in respect of any disputes which may arise out or in connection with this Agreement. The foregoing shall not limit the right of the Lender to start proceedings in any other country. |
15.3 | If it is decided by the Lender that any such proceedings should be commenced in any other country, then any objections as to the jurisdiction or any claim as to the inconvenience of the forum is hereby waived by the Borrower and it is agreed and undertaken by the Borrower to instruct lawyers in that country to accept service of legal process and not to contest the validity of such proceedings as far as the jurisdiction of the court or courts involved is concerned. |
SIGNED for and on behalf of
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TOP SHIPS INC.
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/
s/ Evangelos Ikonomou
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Evangelos Ikonomou
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Director / Chairman of the Board
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Witness:
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Signature:
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Full name:
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Address:
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Occupation:
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SIGNED for and on behalf of
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ATLANTIS VENTURES CO.
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/s/ Geoffrey Peter Cone
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Mr. Geoffrey Peter Cone
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Vice President/Secretary/Director
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Witness:
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Dalva Cruickshank
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Personal Assistant
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Aukland
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Signature:
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/s/ Dalva Cruickshank
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Full name:
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Address:
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Occupation:
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1. | BACKGROUND |
1.1. | The Client currently has 1xMR in the water 1xMR under construction at Hyundai Mipo Vinashin ("The Vessels") and is looking to finance these. Both are on long term time charter with Stena Weco AS. |
1.2. | This mandate agreement for sale and leaseback financing ("Mandate Agreement") is supplemented by the attached standard terms and conditions (the "Standard Terms"), which constitute an integrated part of the Mandate Agreement. In the event of any conflict between the provisions of the Mandate Agreement and the Standard Terms, the Mandate Agreement shall prevail. |
1.3. | The Manager has introduced the Client to Northern Shipping Funds to secure financing of The Vessels in the form of a Sale-Lease-Back facility. |
1.4. | The Manager is also hereby retained as advisor to provide the Client with financial advice and assistance in connection with the Transactions (the "Engagement") on the terms set forth in this Mandate Agreement. |
2. | THE ENGAGEMENT |
2.1. | The Manager shall assist in coordinating and executing the Transactions for the Client and will provide general and financial advice and assistance in connection with the structuring and the execution of the Transactions. In line with customary market practice and to the extent required for the completion of the Transactions, the Engagement includes: |
i. | Arrangement services: The Manager shall assist the Client in executing the Transactions, including assistance in the coordination of the Transactions from financiers, and assistance from other external advisors and suppliers, such as auditors and lawyers, only if required for achieving the objective of the engagement as this is described in clause 1.3. The Manager shall assist the Client in establishing the transaction model, conditions and timing of the Transactions, and in achieving a controlled and effective marketing of the Transactions. |
ii. | Documentation : The Manager shall assist the Client in the preparation of necessary presentation material and documentation in connection with the Transactions based on the information the Manager receives from the Client, all to the extent required by applicable laws and regulations or otherwise agreed between the Manager and the Client. |
iii. | Marketing: The Manager shall co-ordinate, prepare and execute the marketing of the Transactions. The Manager shall actively endeavour to generate the required level of interest among relevant financiers as applicable for the Transactions. The Manager shall assist the Client by arranging presentations for financiers as applicable in connection with the Transactions. |
iv. | Negotiations: The Manager shall co-ordinate and assist the Client in negotiations with financiers. |
v. | Other: The Manager shall provide such other services as may reasonably be expected in connection with the Transactions of the size and nature of the Transactions and/or set out in the Mandate Agreement. |
2.2. | The Manager performance of the Engagement is conditional upon the provision of the necessary information and documentation by the Client. |
2.3. | The Manager does not warrant that the Transactions can be carried out on the terms and conditions that are anticipated by the Client, or at all. Accordingly, the Manager do not render any guarantee that the Transactions can be completed. |
2.4. | The Manager's duties according to the Engagement shall not include advice of tax, legal or accounting nature and no advice given by the Manager shall be deemed as advice on tax, legal or accounting matters. |
3. | MANAGER'S REMUNERATION |
3.1. | The Manager is entitled to the following remuneration in connection with the Engagement: |
3.2. | In the event the Client terminates this Mandate Agreement without cause before the Transactions are completed, the Manager's right to fees pursuant to this Mandate Agreement shall survive and remain in full force and effect and continue to apply where any transactions that were initiated by the Manager and to which this Mandate Agreement would have applied (had the Manager's Engagement been retained) is concluded by the Client within 24 months from signing of this Mandate Agreement. |
4. | CONFIDENTIALITY |
4.1. | The Manager acknowledge that the business of the Client is intensely competitive and that the Manager's Engagement by the Client will require that Manager have access to |
4.2. | During the term of this Mandate Agreement and at all times after the termination of the Mandate Agreement, the Manager shall not disclose any of the confidential information, other than in the proper performance of the duties contemplated herein, or as required by a court of competent jurisdiction other administrative or legislative body; provided that, prior to disclosing any of the confidential information to a court or other administrative or legislative body, the Manager shall promptly notify the Client so that the Client may seek a protective order or other appropriate remedy. The Manager agrees to return all confidential information, including all photocopies, extracts and summaries thereof, and any such information stored electronically on tapes, computer disks or in any other manner to the Client at any time upon request by the Client and upon the termination of the Engagement for any reason. |
5. | DURATION OF ENGAGEMENT |
5.1. | The duration of the Engagement is from the date of signature of this Mandate Agreement and until the earlier to occur of: |
i. | a termination of the Mandate Agreement by either the Client or the Manager, which may be done at any time and with immediate effect upon written notice to the other party; |
ii. | such time as the Transactions has been completed and all payment obligations met; |
5.2. | The Mandate Agreement Section 3 ("Manager's Remuneration"), Section 6 ("Governing Law and Disputes"), the Standard Terms Section 2 ("Reimbursement of Expenses"), 3 ("Governmental Tax"), 4 ("The Manager's Responsibilities"), 7 ("Manager's Liability etc") and 8 ("Manager's Indemnification, etc") will continue to apply after expiry of the Engagement. |
6. | GOVERNING LAW AND DISPUTES |
6.1. | The Mandate Agreement is subject to the laws of England and Wales. |
6.2. | Any dispute arising out of or in connection with this Agreement shall be resolved through friendly consultations. Any dispute not resolved shall be conducted in accordance with the arbitration centre's rules and submitted to London Maritime Arbitrators Association (hereinafter refer to "LMAA") in London, England for arbitration in accordance with the then prevailing LMAA rules. |
7. | SIGNATURE |
7.1. | The Mandate Agreement shall be signed on behalf of the Client by such person authorised to enter into such agreement on behalf of and committing to the Client. The signatory so signing on behalf of the Client warrants that he/she holds such right to sign on behalf of the Client. |
For Top Ships Inc
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For Navis Finance AS
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/s/ Alexandros Tsirikos
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/s/ Christian Haukenes
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Alexandros Tsirikos
CFO
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Christian Haukenes
Founding Partner
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Name of Significant Subsidiary
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Country of Incorporation
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Portion of Ownership Interest
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Banksy Shipping Company Limited
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Liberia
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100%
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Monte Carlo 71 Shipping Company Limited
|
Marshall Islands
|
100%
|
Monte Carlo One Shipping Company Ltd
|
Marshall Islands
|
100%
|
Monte Carlo Seven Shipping Company Limited
|
Marshall Islands
|
100%
|
Monte Carlo Lax Shipping Company Limited
|
Marshall Islands
|
100%
|
Monte Carlo 37 Shipping Company Limited
|
Marshall Islands
|
100%
|
Monte Carlo 39 Shipping Company Limited
|
Marshall Islands
|
100%
|
Top Tanker Management Inc.
|
Marshall Islands
|
100%
|
Lyndon International Co.
|
Marshall Islands
|
100%
|